Thankful Thursday, November 19

Pamphlets needs to be finished and turned in.Define 1-20 pages 470 (chapter 17)Go over Chapter 17 Project

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Groups:

Vocabulary/Reading Focus ?sReading Check ?s/Create a reviewNotes sections 1 & 2IllustrationsNotes Section 3/Create PowerPoint

GROUP 1 GROUP 2 GROUP 3 GROUP 4 GROUP 5 GROUP 6

Jackson Katelyn Ryan Alexis Kate Hannah

Alexis Cam TJ Hunter Aaron Jessica

Thomas Tabby Liz Dylan Lauren Elizabeth

Jocelyn Nya Justice Jacob Tristen Maggie

Alex Chyra Vic Keanna Nate Selah

Groups:

Vocabulary/Reading Focus ?sReading Check ?s/Create a reviewNotes sections 1 & 2IllustrationsNotes Section 3/Create PowerPoint

GROUP 1 GROUP 2 GROUP 3 GROUP 4 GROUP 5

Kayla Daniela Tiffany Heath Jessica

Chase Chandler Courtney AlexisDemetria

Kane Rodal Claire Becca Samantha

Sydney Austin Gabe Kaeli Savannah

Mike Javae Ian Jay Natalie

Marvelous Monday, November 30

OPENING ACTIVITY:•Copy the following question and write out its complete answer.A country with a market economy will support and maintain property rights to increase itsa.unemployment rate.b.government debt.c.money supply.d.growth rate.

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You may You may choose your choose your

seat.seat.

Groups finish their presentations on Chapter 17• 1st – 4 groups• 3rd – 3 groups

• Explain to students they are to take notes and will need these notes for Friday’s notebook check.

Terrific Tuesday, December 1

OPENING ACTIVITY:•Copy the following question and write out its complete answer.Which factor most contributed to improved cell phone technology in recent years?a.Government regulationsb.Competition among companiesc.Increase in stock offeringsd.Abundant natural resources

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Reminder…

• If you did not turn in a paper telling me what you did for the project, do so before you leave class today.

• If you were absent, I need you to write down what you did for the project and turn it in to me.

What is Economics? •Many people say ECONOMICS is the driving force of human interaction and studying it reveals why people and GOVERNMENTS behave in particular ways. When you think of the word ECONOMICS, what are the first 3 words that come to mind?

“The Economic System at Work”• Why you study this in Civics…

American economic freedoms include the freedom to buy and sell, to earn a living, to earn a profit, to compete, and to own property.

Think/Pair/ShareWhich of these freedoms have you experienced in

your daily lives?How are these freedoms important to the health and

well being of US citizens?

Chapter 17-1

• The US has a “free market” economy. This means that if you want to start a business, you can. Your success will be determined by your ability to run a business and the market, not by a government agency. This is why the US can be described as having a “market” economy.

Economic Systems

• The purpose of an economic system is to help people create and obtain the goods and services they want and need.

• How goods and services are obtained is what distinguishes different economic systems from each other.

Competition for Resources

• In order to provide a good or service, resources are needed.

• Resources are not unlimited, so businesses and individuals must compete for the resources they need.

• This competition eventually affects everyone, not just business owners. HOW?

• It affects the prices we pay for the goods we want.

Scarcity

• …is one result of competition for resources.• ...is the combination of limited economic resources

& society’s unlimited wants.• …is the most basic problem of economics because

it forces people to make decisions about how to use society’s resources effectively.

Supply and Demand

• Changes in prices are usually the result of the laws of supply and demand.

• These laws are among the most basic of all economic principles.

Law of Supply

• States that businesses will produce more products when they can sell them at higher prices.

• Businesses will produce fewer products when prices are low.

DOES THIS MAKE SENSE TO YOU?Why wouldn’t a business want to sell more products

at a lower price if it meant people would buy more?Think about back-to-school sales. Notebooks @ $1

each. No limit. “SALE” = Notebooks # .25 limit 4 ---Why the limit?

Law of Demand

• …states that buyers will demand or want a greater quantity of a good when its price is low.

• As prices rise, the quantity demanded falls, meaning when the price of a good goes up, people buy less of that good.

• Turn to page 453.

How do businesses use the laws of supply and demand to try to make a profit?

• To increase their profit, businesses have to find the highest price that customers are willing to pay for the goods or services they offer.

Connect to Math

Jan’s Records is selling CDs for $18. Today, Jan sold 5 CDs. Nita’s Music is selling CDs for $12. Today Nita sold 10 CDs. Which merchant made more money? Why?Jan made $90, while Nita made $120.Although Jan wants to supply CDs at $18 a CD, there is limited demand for CDs at that price. In contrast, Nita is supplying CDs at a price which customers prefer, or demand.

What factors might affect the demand for a good or service?• Price• Quality• Usefulness• Ease of use• advertising

Putting a Price on Things

Price or VALUE is based on two basic factors

1. Supply

2. Demand

-Supply

-the amount of a good or service that is available for consumers to buy

-Demand

-the amount of a good or service that consumers are willing to buy

Determining Price

-Price is determined by comparing the amount of demand to the amount of supply and finding an amount where they are equal

--Market or Equilibrium Price

this is the point

at which

supply and demand

meet and price

is determined

Effects of Price

-Shortages

-when demand is greater than supply

-What happens to price?

•It goes up

-Surplus

-When supply is greater than demand

-What happens to price?

* It goes down.

The Law of Demand-quantity demanded is inversely proportional to price.

Simply put, the higher the price, the lower the demand and the lower the price, the higher the demand.•In numbers it would look like this chart

Demand Schedule for Cookies:

At a price of Consumer will buy

.70 cents 100 cookies

.60 200

.50 400

.40 700

.30 1,100

.20 1,600

.10 2,300

Draw a graph based on the

info in the chart.

•Economists also like to look at things graphically.•It enables them to see the quantity and price on a limitless scale. •To do this they plot what is known as a demand curve:• The price is always on the vertical axis (y) and the quantity is always on the horizontal axis. (x)• If we were to plot our points and draw a demand curve for the cookies it would look like this graph.

                           

                                                                                                               

Elasticity-Elasticity

-Is the degree to which a change in price affects the demand for the product

-Elastic Demand

-a change in the price DOES affect the quantity demanded

-Inelastic demand

-change in the price does NOT affect the quantity demanded

More Characteristics of a Market Economy• Free Enterprise is the ability of business owners to

operate however they see fit, with little direction or interference by government.

• Free Enterprise offers businesspeople the opportunity to make huge profits.

• Competition is vital to the free-enterprise system. Remember, competition is the main factor in setting prices. Competition also drives companies to improve their products.

• The constant desire to improve products means that innovation is also important in free enterprise.

Monopolies

• Are illegal in the US except for certain public utilities to include the US Postal Service

The US Economic System

• Although the US is a market economy, it has characteristics of other types of economies, making the US a mixed economy.

• For example, you can start your own business (market economy) but you are subject to government regulations and guidelines (command economy).

• Sometimes the government intervenes in business to help control prices. One way it does this is by subsidizing, or giving money to certain industries.

American Business Economies of ScaleThe idea that a larger business is more efficient than a smaller one because of its ability to do things in larger volume. Ex: To produce steel, electricity, automobiles, & ships requires large & expensive machines. Only large companies have the resources and the tools to produce these goods efficiently.

•Conglomerates – the merger of businesses that produce, supply or sell a number of unrelated goods. The government monitors conglomerates closely to be sure that economic competition is not harmed.

What are some ways the government helps protect workers?• By establishing minimum wage laws, laws

guaranteeing workers’ safety, and laws to protect people from discrimination

Let’s Review: True or False

1. The US economic system is called capitalism.“T”2. The US economic system is also called a free enterprise system.“T”3. Capitalism encourages people to invest their money.“T”4. There is a lot of government interference in the US economic

system.“F” – In the US economic system, there is freedom to compete without

unreasonable government interference.5. In the US, monopolies, except for certain public utilities, are illegal.“T”

Fill in the blank

6. The states that businesses will produce more products if they can sell them at higher prices.

Law of Supply7. A company has a(n) if it is the only one selling or providing a product or service. monopoly8. is the lack of a particular resource. scarcity9. is the money that a business has left after it has

paid its expenses. Profit

Exit Ticket (write in your NB)• State one thing you learned about the Law of

Supply.• State one thing you learned about the Law of

Demand.• State the difference between elastic demand and

inelastic demand.

Wonderful Wednesday, December 2

OPENING ACTIVITY:•Copy the following question and write out its complete answer.

Which statement best describes the relationship between supply and demand?a.A product with high demand and low supply will experience an increase in price.b.A product with low demand and high supply will experience no change in price.c.A product with low demand and low supply will experience an increase in price.d.A product with high demand and high supply will experience a decrease in price.

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Economic ChoicesOpportunity CostThis is the benefit that you have given up in order to pursue an alternative.Ex: If you decide to go to college after you graduate from high school, one of the biggest costs is the full-time income that you will not be able to earn because of the time you will have to spend studying and going to classes.

Every choice involves an opportunity cost!

Trade OffThis is the choice that you make when faced with economic decisions where you have to choose one thing over another.Ex: If you choose to buy a DVD player, you are exchanging your money for the right to own the DVD player rather than something else that might cost the same amount.Economists identify many trade-offs in life. For example, more pollution-free air means less driving, and more driving means less pollution-free air.Taking more time to study for a test means having less time texting, and texting for a long time on the phone means spending less time studying for the test.

Sole Proprietorships

-A business owned by a single person or a married couple

-3/4 of all businesses are sole proprietorships

• plumber, dentist, lawyers

• “Helen’s Kitchen”

• any business that 1 person developed. ...

-Advantages• A sole proprietor has complete control &decision-making power over the business.•No corporate tax payments. •Minimal legal costs to forming a sole proprietorship.•Few formal business requirements.

Partnerships* owned by two or more people

•A partnership is just that: -an agreement between two or more people to finance and operate a business.

-Advantages

-pool resources and capital $$

•Because more than one person is involved in the venture, it may be easier for you to secure financing than if you were a sole proprietor.

-Disadvantages• Limited flexibility•partners are personally liable for business debts

and liabilities

Corporation

A business that has a great many owners

• A corporation provides limited

liability for the investors.

• The corporation files its own tax

return and pays taxes on its income.

- -pay dividends to shareholders

• Dividends are payments made by a

corporation to its shareholder members.

• When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders as a dividend.

Non-Profit Organizations

-provides a service but not to make large profits for the owners

-many are Ex: charities or service groups

• actively engage in activities of public or private interest without any commercial or monetary profit purposes.

EXAMPLES:• environment, humanitarian aid, animal protection • education, the arts, social issues, charities, health care • politics, religion, research, sports or other endeavors

Advantages

•Tax exemption, eligible for private or public grants

•Limited liability

Article on non-profit

Tom Tillis

ENTREPRENEUR

Productivity

-Productivity

-the amount of a good/service than can be produced in a given time

-Increases in productivity allow producers to make more of a product in a given time and at the same price which decreases cost and increases profits

-better technology is a major focus of increasing productivity

The Government’s Role• Government ensures that big corporations do not

destroy competition from small businesses.• Government protects a person’s rights to own

private property and to buy and sell in a free market.

• Government taxes business income.• Protects workers’ health and safety• Prevents pollution of the environment• Protects buyers from dishonest practices & harmful

products• Ensures that employers cannot discriminate against

workers or job applicants• Congress established a federal minimum wage

Handouts

• Liz’s Sections 1 & 2 review (print/copy)

Extra assignment if needed• Graphic Organizer activity: describing the

relationship between economic terms; ex: monopoly & competition

• Handout (print/copy)

Exit Ticket

• State 3 things you learned today• State 2 ways you will study for tomorrow’s test

Icivics.org packet – “The Market Economy”

Review/discuss packet (10 min)

• The process of obtaining goods and services to satisfy your wants is called the want-satisfaction chain.

A sandwich on a bun Grain

becomes flour

Flour becomes bread

Bread is delivered to school cafeteria.

Lunch is served

The Want Satisfaction Chain

Exit Ticket

• State 1 thing you learned about each of the following: types of economies, supply & demand, and types of businesses

• State 1 positive comment about the group project.• State 1 thing you would change about the group

project.

Groups

• Create a chart or diagram describing the problems or limitations that the US economy would experience if the economic freedom you are assigned were missing.

1.Freedom to compete2.Freedom to own property3.Freedom to buy and sell4.Freedom of workers to compete for jobs5.Freedom to earn profitsPages 452-453

Turn to page 60…

• SM p. 60 – students determine the advantages & disadvantages of various types of economic systems (10)

The federal government buys products from

businesses & individuals and provides services to businesses & individuals.

Businesses produce goods & services that are purchased by households. Businesses

also pay wages to individuals and taxes to the

government.

Households buy goods & services from businesses & the government. Individuals also provide businesses with labor & the

government with labor & taxes.

Turn to page 55

Factors of Production ( FOP)

-Capital or Capital Goods---the money or tools needed to produce goods/services

-Land / Resources– the natural resources needed to produce goods/services

Factors of Production

-Labor– the work required to produce goods/services

MENTAL & PHYSICAL!

• Entrepreneurs ARE NECESSARY!!!!

-Management—the decision making process that is involved in producing goods/services

Traditional Economy

-economy where people supply most of the goods and services they use

-many things are done by tradition

-usually in places w/little technology

It is based on agriculture, fishing, hunting, gathering or some combination of the these.

It may use barter instead of money.

Third World countries (Africa, Asia, Latin America, Middle East)

Advantages

-fosters a sense of community

-low unemployment rate

- Low crime rate

- Good for smaller countries

Disadvantages

-does not allow for much economic growth

-changes are made slowly

-does not take advantage of technology

-few incentives for entrepreneurs

-limits choices for consumers

-lowers standard of living

-not good for larger countries

-

•make their own clothing and tools

•If they produce more food than they need, they trade the surplus, (or extra food), for goods made by others.

Command Economy

-economy where the government controls the factors of production

-Government makes all decisions

An economy where supply and price are regulated by the government

EXAMPLE: Cuba and North Korea

OPPOSITE OF OURS!

Advantages- Land and capital

are owned by gov’t.

- No competition

- All the same class system (all would be equal)

Disadvantages

-you have little if any influence over the economy

-govt tells producers what to do (commands it)

-term “communism” refers to command economics

-one class would rule

Market Economy

individuals make all economic decisions according to supply and demand

-laissez-faire economics – little gov’t involvement

-also called free market, free enterprise, or capitalism

-competition and supply and demand determine the economy-----the invisible hand”

Advantages-citizens, not

the govt’ own the F.O.P.

-higher individual freedom

-businesses decide the what, how and for whom…

-we decide what we want to buy

-CHOICES!!

Disadvantages

-rich get richer

• if you want to start your own business, or buy/own a business you must have the financial capital to start and keep your biz

• $$$$$$

Mixed Economy

-a mixing together of market & command systems

-individuals have economic freedoms

-government retains some control for benefit of citizens

-private ownership & decision making are combined with government intervention and regulations…

US is aka mixed

Advantages

- People can own their own businesses.

-The government controls the mail system.

-The government controls most of the roads.

-Waste collection and treatment are usually provided as a service by the local government.

-The FDA bans certain medical drugs.

-The government has created a minimum wage law.

-Government provides social welfare payments to some citizens.

Disadvantages- Goods and services

go to those with the most money

-Business people can control the market for a good or a service, and force consumers to pay high costs or workers to accept low income. -Since the business cannot always correctly anticipate the desires of consumers, at times there will be an overproduction of goods and services& an underproduction of other goods and services.

Terrific TuesdayApril 28

Grading Period ends Friday, May 1!

D55

Journal:

• How do different economic systems help satisfy people’s needs? Be specific. Give at least 2 examples.

Groups: create review games

using key terms

Key Terms p. 450

Wonderful Wednesday

April 29

Voc. Review Game – which group?

D58

EducationPortal

• What is economics? Definition & types• The Importance of Consumer choice in economics

Activity

• T-chart – List 5 wants and 5 needs.

Wants/Needs

EducationPortal

• Microeconomics Resources: scarcity & utility

Review: What factors combine to create scarcity?• Limited economic resources & society’s unlimited

wants

Thankful ThursdayApril 30

Voc. Review Game.

VOCABULARY QUIZ TOMORROW!

D59

Political Cartoon Analysis

• “Concentration of the Country’s Wealth”

Journals:

• How could the way a business is organized affect the experience of working there?

Fabulous FridayMay 1

VOCABULARY QUIZ!

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USA Test Prep

American Principles & Values – 5 partsGovernment Structures – 5 partsThe Legal System – 8 parts

Retake until you get 100%!

Marvelous MondayMay 4

In the news…

D61

• Groups: “Decision Tree Activity” students are to imagine that they are entrepreneurs preparing to start their own business. They must decide if they want to establish a sole proprietorship, a partnership, or a corporation. (pros/cons) – Handout “B”

Turn to page 61

Disadvantages of sole proprietorships

• The sole proprietor of the business can be held personally liable for the debts and obligations of the business.

• Risk extends to any liabilities incurred as a result of acts committed by employees of the company.

• All responsibilities and business decisions fall on the shoulders of the sole proprietor. (you!)

• Investors won’t usually invest in sole proprietorships.

Corporations

-Limited liability

-the ability of a corporation to protect its shareholders by placing only the amount of capital they have invested at risk

-Incorporation---legal process of forming a corporation through state government

Disadvantages of NPOs• Cost:

• Creating a nonprofit organization takes time, effort, & money.

• NPOs are legal entities under federal, state, and local laws, the use of an attorney, accountant costs $$

• Paperwork: • Keep detailed records. • Certain documents—articles of incorporation, bylaws,

annual reports, financial records—must be prepared in a specific manner and filed with specified agencies by certain deadlines.

• Shared control: • Personal control is limited. • A nonprofit organization is subject to laws and regulations,

including its own articles of incorporation and bylaws. • In some states, the nonprofit is required to have several

directors, who in turn are the only people allowed to elect or appoint the officers who determine policy.

• Scrutiny by the public: • A nonprofit is dedicated to the public interest; so its finances are

open to public inspection.

EducationPortal

• Types of Assets: Money, stocks, & bonds (6:27)

DJIA – Dow Jones Industrial Average

… is the most widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded stocks, primarily industrials. The 30 stocks are chosen by the editors of the Wall Street Journal.… is an important index that many people watch to get an indication of how well the overall stock market is performing.… is composed mainly of companies found on the NYSE.

Handout

• Analyzing Stock Ownership

NASDAQ

• The Nasdaq is also a term that can refer to two different things: first, it is the National Association of Securities Dealers Automated Quotations System, which is the first electronic exchange, where investors can buy and sell stock. Second, when you hear people say that the "the Nasdaq is up today," they are referring to the Nasdaq Composite Index, which, like the DJIA, is a statistical measure of a portion of the market.

• The Nasdaq Composite tracks approximately 4,000 stocks, all of which are traded on the Nasdaq exchange.

Stock Market Activity

Using the netbook or your phone, check out the following website or you can browse other stock-related websites:www.money.cnn.com/data/markets/dow

Activity:You have $10,000 to invest in the stock market. Decide which stock(s) – at least 3 - you want to invest in. Graph your stock. Keep up with this graph! You will be checking your stock and graphing daily for the next 2 weeks.

Terrific TuesdayMay 5

In the news…

Test on chapter 17, SM 55-61 Thursday

Check your stocks!

D61

YouTube

• 14 year old investor on his way to…

Handout

• Graphing activity

Handout

• “Understanding the Market Mechanism”

3 Groups

• Create an informative visual on the type of business you are assigned.

Chapter 17-2Business organizationsWhat are some examples of sole proprietorships?Small businesses such as gas stations, hair salons

Why do you think some small business owners might set up a partnership instead of running the business as a sole proprietor?A business owner might not want to take on all of the responsibility of running a business and prefer to share it with others. A business owner might need more capital to start a business, which could be obtained from one or more partners.

Review of types of businesses

A type of business that is recognized as a separate legal entity

• corporation

Shares of ownership in a corporation

• stocks

A company that controls all production of a good or service• monopoly

Corporate profits paid to stockholders• dividends

This is a method used by corporations to borrow money• Selling bonds

Every corporation has one of these that answers to the stockholders.

• Board of directors

These organizations include charities, scientific research associations, and groups dedicated to cultural and educational programs.• Nonprofit organizations

This is the payment made to individuals or banks for the use of their loaned money• interest

True or False

• The government will offset your loss if your small business fails.

• False

True or False

• Big businesses are essential to our economy.True

True or False

• State governments grant corporations the right to operate and have laws on how to incorporate a business.

True

True or False

• If a corporation goes out of business, its assets are sold to pay off its debts.

True

True or False

A corporation’s board of directors manages daily business operations.False – corporate officers do

TRUE OR FALSE

• Nonprofit organizations are taxed by the government.

FALSE

Fill in the blank…

• Corporation are owned by…stockholders

You have purchased shares in a company. What will happen if the company fails?• You will only lose the money you paid for the

shares of stock.

Fill in the blank.

• Loans to a corporation are called…Bonds

Identify…

• Their job is to represent stockholders in making decisions for the corporation

Board of Directors

In a corporation, who elect the board of directors?• stockholders

What happens to the price of a stock when its company has very high profits?• The price of the stock will rise.

Who pays a business’s debts in a failed sole proprietorship?• The owner of the business

Chapter 17-3

Factors of Production: natural resources, capital, labor, entrepreneurshipAll countries make choices about production.

Every country must ask:•What are we going to produce?•How are we going to produce it?•For whom are we producing it?

Natural Resources

A natural resource is considered a factor of production only when some payment is necessary for its use. Ex: land

Capital• Refers to the equipment you may need to operate your

business (the manufactured goods used to make other goods & services).

• Includes tools, trucks, machines, office equipment, etc.• “Financial capital” – refers to the money used to buy the

tools and equipment – the capital goods – used in production.

• Where can you get financial capital? A loan from a bank or the Small Business Administration (SBA), an agency of the federal government that provides assistance programs for small businesses.

• Capital could come from getting people to invest in your business, or you could set up your business as a corporation and sell stock to raise capital.

Entrepreneurship

• A person who organizes, manages, and assumes the risks of a business

• They may come up with an idea for a new product or a new way of doing business

• They put up their own labor or capital and take the risks of failure in the hopes of making a substantital profit

• Ex: Bill Gates

Labor

• Refers to human effort, skills, and abilities used to produce goods and services; not just “workers.”

• Workers are paid hourly wages or salaries (fixed earnings).

Why do you think the government provides loans to businesses?• Some business owners may not have the money or

be able to get a large enough loan through a bank. Helping businesses be successful helps keep the economy strong, which also benefits the government.

WednesdayMay 6

In the news…

Test on chapter 17, SM 55-61 Tomorrow!

Check your stocks!

D62

Constructive Response

• Do you think the government should regulate business? Why or why not? Be specific and provide examples to support your answer.

Turn to page 56

Turn to Page 57

Diminishing Utility

Diminishing Utility-the law of demand says that a lower price will increase demand... but this is limited

-diminishing utility

-the amount of satisfaction or usefulness of a product decreases as more and more are consumed.

-Ex.—You can only enjoy so many soft drinks before you can’t drink anymore ...no matter the price you are paying

-The demand of many consumers is based on their income level aka purchasing power

-A change in either direction to a person’s purchasing power will change their demand for goods and services

-personal income

An individual’s total earnings from wages and investments

-disposable income

The amount of income left to an individual after taxes have been paid, available for spending and saving.

INCOME LEVEL CHANGES

Change in Consumers

-The number of possible consumers in an area affects demand

-Faster growth areas may face higher levels of demand–

• b/c of more people …

-Areas of the country who are losing population will face lower demand for goods-

• b/c of less people…

Consumer Expectations

- Many consumers plan when making economic choices and

their predictions for the future change their demand.

- A period of high unemployment or economic boom can greatly change the demand for certain goods.

Consumer Tastes

-Because consumers have many choices of where to spend their money, the popularity of items will change demand.

-Advertisers spend billions every year to shape the “tastes” of consumers.

-Some items become high demand items for a short while and then very little demand.

Substitute Goods-Substitute goods are goods that can be used in place of another product

ex.—chicken or beef

-if a good experiences a price change then the substitute good will face a demand change

ex—chicken price increases demand for beef increases

Complementary Goods

-goods that work with another product

Ex- peanut butter & ___

-a change in the demand for one will many times affect the demand for the other too!

Turn to Page 58

Law of Supply

-Supply

-the amount of a particular good/service that producers will supply at a given price

-Law of Supply

-as the price of a good/service increases then producers will supply more of the product and as the price decreases they will supply less.

Diminishing Returns

-The law of supply says that producers will supply more at a higher price but this is limited.

-diminishing returns

-The producer can only produce so much of the product before its cost is more than the profit received from its sale.

-Ex.—You can only increase factory production so far until a larger factory is needed which may be more costly than its worth.

Elasticity

-Elasticity

-Is the degree to which a change in price affects the supply for the product

-Elastic Supply

-a change in the price does affect the quantity demanded –easily able to produce more

-Inelastic Supply

-change in the price does NOT affect the quantity demanded –hard to produce more

Cost of Resources

-The cost of the materials that go into goods and services can affect the production costs which affect the amount which can be supplied at each price level

-Examples

-higher wages lowers supply

-cheaper resources increase

Company Expectations

-Producers as well as consumers make economic plans. A company that expects record sales or few sales will adjust its supply levels

-Economic forecasts by the government become very important to large producers

Government Policy

-Governments can affect suppliers in many ways

-More Regulations or fewer regulations producers must follow can affect supply levels

-Gov’t subsidies can help some producers cut costs to increase supply levels while fewer subsidies cause production costs to rise

Taxation Policies

-Taxes—higher or lower taxes affect the overall profit level which determines supply

-lower taxes means greater profits and more supply

-higher taxes means fewer profits and less supply

Alternative Products

-Supply can also be affected by other products that producers could supply

-If price falls for one product then they will supply less and shift production to another type product

Turn to page 59

Comparative Advantage• Comparative AdvantageWhen one nation is better able to produce a good or service than

another nation.

• What causes the advantage???• The ability of a country to produce a good at a lower cost than

another country can.Ex: The US could make color TVs. Other countries, however, can make

them more efficiently (at a lower cost). As a result, the US buys many color TVs made abroad.

• Having natural resources; ex: Saudi Arabia has huge deposits of oil which allows it to export this oil.

• Having labor and capital; ex: US has large supplies of wealth, many highly skilled workers & advanced technology so it can make expensive products like airplanes & weapons.

Producing Goods• Productivity is the amount of a good or service that can

be produced in a given time.• What does Increased Productivity do?Usually leads to higher wages, higher profits, lower prices• What is the Effect of productivity on Inflation???According to Keynes, moderate or creeping inflation has favorable

effect on production particularly when there are unemployed resources in the country. Rising prices increase the profit expectations of the entrepreneurs because the prices increase more rapidly than the cost of production.

Specialization of Labor/Division of Labor-Method of having workers do only a part of a product but do it very efficiently-Blue color labor – factory worker-White color labor – office worker

Producing Goods• Labor Intensive Work – job that requires a lot of

human effort and physical contact• Are lower paying jobs• Many labor intensive products are produced

overseas.

Mechanization – using machinery to make products or provide services – called automation.

Machines sometimes take the jobs of people.Machines increases productivity.

Producing Goods

• Interchangeable parts• Mass production• Assembly line

Growing Businesses

Law of Diminishing Returns

• Economic law that states that the level of return for additional labor or work will decrease at some point and continue to decrease.

What does this mean?It doesn’t mean negative returns until the number of workers

exceeds the available machines or workspace. In everyday experience, this law is expressed as “the gain is not worth the pain.”

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Study Guide

JeopardyJeopardylabs.com/play/civics-chapter-175

Groups: USING YOUR PHONES…• Research businesses in the US and identify local or national businesses that you consider monopolies or near monopolies. Report to the class on what action has or should be

taken against them.

Fabulous FridayApril 24

Test – State & Local Government

D54

Icivics.org

• handouts

Vocabulary to learn

• 1-20 p. 470• Groups: create a game to learn terms

ThursdayMay 7

In the news…

Test on chapter 17, SM 55-61 Tomorrow!

Check your stocks!

D63

Study Guide

• Complete/go over

Test Review - Jeopardy

GroupsChapter 18, Sections 1 & 3You are responsible for learning the material in these sections.What you need to do:1.Generate (write) notes for each section. (need a copy for each member of your group and one for me)2.Write review questions w/answers for each section. (need a copy for each member of your group and one for me)3.Create a presentation for each section that you will present to the class. Be creative!