Understanding Basic Economics

Warm – UpJanuary 27, 2011

CRCT Prep

1. Who takes a financial risk in starting a new business in a market economy?

• A. Consumers

• B. individual business people

• C. government planners

• D. combination of planters and investors

Activator:UNPACK THE STANDARD

SS7E3 The student will describe factors that influence economic growth and examine their presence or absence in Nigeria and South Africa.

• a. Explain the relationship between investment in human capital (education and training) and gross domestic product (GDP).

PULL OUT THE NOUNS AND VERBS WITHIN YOUR GROUP!

What should you be able to do??????

EQ: What is the relationship between investment in human

capital (education and training) and gross domestic product (GDP)?

What is the relationship between investment in capital (factories, machinery, and technology) and gross domestic product (GDP)?

Today we learned the relationship between human capital,

investments in capital, and GDP because we need to understand the impact it has on economic

growth in Africa.

SS7E3 The student will describe factors that influence economic growth and examine their presence or absence in

Nigeria and South Africa.

• a. Explain the relationship between investment in human capital (education and training) and gross domestic product (GDP).

• b. Explain the relationship between investment in capital (factories, machinery, and technology) and gross domestic product (GDP).

NOTE ‘CARD’ TAKING!

• Every time you see this picture you have a new note card to make!

Front

Back

VocabWord

Definition:

Picture

Relationship

EXAMPLE

EMBARGO

A stop on trade between countries.Countries around the world placed an embargo on South Africa until they changed their discriminatory policies.

Vocabulary word

Definition

Picture

Relationship

HUMAN CAPITAL

• Human Capital means the knowledge and skills that make it possible for workers to earn a living producing goods and services.

Human Capital

More skills and education workers have the better, they are able to work with

less mistakes and sell more products = more Money in the pockets of the companies they work for.

• (ex. USA invest in human capital by providing workers with an education in turn workers work in good paying jobs that sell more products = high GDP (gross domestic product for the USA)

GDP

• Gross Domestic Product (GDP) = taking the total value of all goods and services produced by a country in a single year and dividing that number by the total population.

RELATIONSHIP

• South Africa---invest heavily in human capital===Higher GDP (Gross Domestic Product)

• However due to the apartheid system that was put in place-the advantages favor the white than the non-white(which have the highest unemployment rate in the country)

• Nigeria---have a strong economy in oil and an educated population However due to government corruption, civil war and military rule have left Nigeria very poor. 70% of population live on only a dollar a day.

Checking for Understanding

Place your card down on the desk and be prepared to hold up your answer!

1. SKILLS AND KNOWLEDGE WORKERS HAVE ARE APART OF A COUNTRY’S ____________.

Human Capital

UNPACK THE STANDARDSS7E3 The student will describe factors that influence economic growth and

examine their presence or absence in Nigeria and South Africa.

• b. Explain the relationship between investment in capital (factories, machinery, and technology) and gross domestic product (GDP).

PULL OUT THE NOUNS AND VERBS WITHIN YOUR GROUP!

What should you be able to do?????? (One page per group, put every ones name on the paper)

(be prepared to answer)

CAPITAL GOODS

• Capital Goods are factories, machines, and technology that people use to make products to sell.

GDP

• Gross Domestic Product (GDP) = taking the total value of all goods and services produced by a country in a single year and dividing that number by the total population.

RELATIONSHIP

• Producing more goods for sell= High Economic Growth and high Profits (money)

• Higher profits=higher GDP(Gross Domestic Product)

Checking for Understanding

Place your card down on the desk and be prepared to hold up your answer!

2. The factories and machines used to make goods are called ____________.

Capital Goods

Relationship (cont’d)

(South Africa-heavily invest in equipment to get gold, diamonds and platinum)

(South Africa-heavily invest in iron and steel production that make automobiles and trucks)

(Nigeria has invested heavily in capital goods for its oil industry. New technology is required in order to compete in the global oil market. The concentration on capital goods for this segment of the economy, however, has left many Nigerians without proper food and housing.)

Closing:

Using the Vocabulary cards your group needs to come up with your own summary definitions for each term discussed in the

lesson.

(Use the same, group unpacking the standard paper, to be turned in)