Review
Some of the earliest examples of economies involved bartering. What is TRUE about a bartering system?
It allows people to exchange goods without using money or any other type of financial item.
What do we call the study of the ways in which money is created and used in society?
economics
What is a direct contrast to a market economy?
planned economy
The United States government sometimes has to interfere with the economy. Why would the government initiate an antitrust suit against a company?
to ensure companies do not monopolize any particular realm of business
Marcus loves a certain candy bar that he thought was only sold in Spain. The other day, he saw that the candy bar is now available in his local grocery store. What process helped bring the Spanish candy bar to America?
global trade
Your favorite Swiss chocolate costs the equivalent of $10 in Switzerland. You ask your local chocolate shop to order the chocolate for you. The shop owner tells you it will cost $20. He tells you the shipping is free and that he is making no profit from this sale. What is the MOST likely reason that the cost is double what it is in Switzerland?
There is a tariff that must be paid on imported Swiss chocolate.
Your classmate Adrian, claims that no ancient civilizations used any types of currency. You disagree with her claim. What is the BEST example you can use to support your claim?
The Babylonians used actual money in the form of grain called a Shekel.
What is TRUE about a capitalist society?
People make an income from wages and profits.
In a market economy, competition is a crucial requirement. What is one benefit to fostering competition in an economic system?
It gives consumers more choices in the quality and price for things they want to buy.
The political candidates keep talking to the citizens about the possibility of a recession. What would MOST likely happen if a country experiences a recession?
Businesses will suffer from decreased sales and profits, eventually leading to closure.
The US government interferes with its businesses to ensure they are safe for the workers and customers. What specific organization helps to ensure that each company follows safety standards such as having the right amount of emergency exits, supplying construction workers with hard hats, or installing fire sprinklers on all building floors?
OSHA
Imagine that your guacamole company depends on avocados that are grown in Mexico. When there is a drought in Mexico and avocados are not able to grow, how is this likely to affect your business for the next year of production?
The lack of avocados could make your business fail.
A US pharmaceutical company has claimed for years that their medication would cure headaches, but they were lying the entire time. The medication was nothing more than candy that they sold as medicine so they could make a high profit. What should happen to this company and why?
A punishment; unfair practices and false claims are not tolerated under government supervision.
A capitalist economy is MOST typically associated with what area of the world?
North America
The socialist economy has several benefits for its society. However, it also has some negative effects. What is one reason that a socialist economy is often criticized?
There is slow development because governments move slowly around planning and approval.
How do global factors influence the economy in your country?
Economic issues in once country can have effect on other countries due to importing/exporting.
or
Severe weather (such as hurricanes), regional disasters (such as earthquakes) and drought, which also have local and global effects
Why are healthy individual finances important to the economy in North America?
or
Unhealthy economic situations can create issues with foreclosures and loss of jobs, etc.
Barter System
allows people to exchange goods without using money or any other type of financial item; they just trade the goods they have so as to receive the goods they want or need
allows individuals and businesses to make their own choices when it comes to what they will buy or earn. Businesses can create the products they want to produce, as well as determine the prices.
Economic Freedom
Competition
lets businesses compete with other businesses who offer the same product or service.
Labor
refers to the human ability to produce those goods or services and includes not only physical labor but also talent and skills.
Income is produced through the wages an individual earns for their work—complete the task, get paid.
Wages
Profits
Income is generated as profit or money above what it costs to make a product—make a product, pay off your expenses, and take the money that’s left over.
What would the effects of unemployment be for the local community?
It is likely that families who have had their income reduced because of unemployment will spend less money on goods and services.
Resources
are things like land, minerals, forests, oil, and so on that exist in the world, all of which can be used to create goods like furniture, perfume, and other products.