The+Global+Economy


 * What is Economics? What is Scarcity? What are Opportunity Costs? What is Economic Integration?**

For an introduction to these concepts, click on the links below. View the videos and complete the quiz for each video. Be prepared to discuss these concepts in class! View the Scarcity video...be sure to complete the quiz at the end! View the Opportunity Cost video...be sure to complete the quiz at the end! View the Economic Integration video...be sure to complete the quiz at the end! View the Barriers to Trade video...be sure to complete the quiz at the end!

People and countries cope with scarcity by making decisions. Every time you decide on how to use your time, money, and energy, you are making an economic decision (and remember, each decision you make has an opportunity cost). Companies and nations also have to make choices. Many of those choices are based on the concept of Comparative Advantage. View the Comparative Advantage video for an explanation...be sure to complete the quiz, too!

For nations and companies to make wise decisions, they must use some type of decision-making process. To learn more about a solid method for making wise decisions, view the Decision-Making video...be sure to complete the quiz at the end! Be prepared to discuss in class.

VoiceThread overview of the basic economic problem and the decision-making process (we will use this VoiceThread as a review in class). media type="custom" key="23905854"




 * Important Terms for this Chapter**
 * Scarcity:** the limited resources available to satisfy the unlimited needs and wants of people
 * Economics:** the study of how people choose to use limited resources to satisfy their unlimited needs and wants
 * Opportunity Cost:** the most attractive alternative given up when a choice is made
 * Supply:** the relationship between the amount of a good or service that businesses are willing and able to make available at a given price
 * Demand:** the relationship between the amount of a good or service that consumers are willing and able to purchase at a given price
 * Market Price:** the point at which supply and demand cross--also call the equilibrium price
 * Inflation:** an increase in the average prices of goods and services in a country
 * Factors of Production:** the four types of resources used to produce goods and services (land, labor, capital, and entrepreneurship)
 * Economic System:** the method a country uses to answer the basic economic questions
 * Command Economy**: the government or a central-panning committee regulates the amount, distribution, and price of everything produced.
 * Market Economy**: based on the forces of supply and demand--individual companies and consumers make the decisions about what, how, and for whom items will be produced.
 * Mixed Economy:** a blend between government involvement in business and private ownership
 * Privatization:** the process of changing an industry from publicly to privately owned
 * Industrialized Country:** a country with strong business activity that is usually the result of advanced technology and a highly educated population
 * Infrastructure:** a nation's transportation, communication, and utility systems and are actively involved in international trade
 * Less-Developed Country:** a country with little economic wealth and an emphasis on agriculture or mining
 * Developing Country:** a country that is evolving from less developed to industrialized
 * Absolute Advantage:** A situation that exists when a country can produce a good or service at a lower cost than other countries
 * Comparative Advantage:** a situation that exists when a country specializes in the production of a good or service at which it is relatively more efficient
 * Gross Domestic Product:** measures the output of goods that a country produces within its borders
 * Gross National Product:** measures the total value of all goods and services produced by the resources of a country.
 * Balance of Trade:** the difference between a country's exports and imports
 * Foreign Exchange Rate:** the value of one country's money in relation to the value of the money of another country.
 * Foreign Debt:** the amount a country owes to other countries
 * Consumer Price Index**: the monthly U.S. federal government report on inflation


 * Important Concepts**
 * The decision-making process
 * Scarcity is a fact of economics
 * There are two basic causes for inflation: demand-pull and cost push
 * The four elements in the factors of production are land, labor, capital, capital, and entrepreneurship
 * The factors of production are used individually or in combination to produce the goods and services in any economy
 * Capitalism is found in market economies and has three main characteristics--the right to private property, profit motive, and a free, competitive marketplace
 * The development factors of a country include the literacy level, technology level, and level of dependency on agriculture

=‍‍Illustrative Graphs from Chapter 2=

The Supply-Demand Curve
Supply Video...be sure to take the quiz at the end of the video! Demand Video...be sure to take the quiz at the end of the video! Markets/Prices Video...be sure to take the quiz at the end of the video!
 * Supply:** the relationship between the amount of a good or service that businesses are willing and able to make available at a given price
 * Demand:** the relationship between the amount of a good or service that consumers are willing and able to purchase at a given price

Supply/Demand Graph 1

Supply/Demand Graph 2



**The GDP Equation (Chapter 2.5)** GDP Video...be sure to take the quiz at the end of the video!
 * Definition of Gross Domestic Product:** measures the output of goods that a country produces within its borders

Factors of Production Video...be sure to take the quiz at the end of the video! Economic Systems Video...be sure to take the quiz at the end of the video! Balance of Trade Video...be sure to take the quiz at the end of the video!

Levels of Economic Development


=Economic Thinking=

Two Schools of Thought on Economics
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