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Unit Two - Economic Systems - Concept Summary

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Phillip Young

on 15 October 2012

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Transcript of Unit Two - Economic Systems - Concept Summary

Economics Summarized Measuring Trade “types of economies” What industries exist in an economy?
Industries (112-127)A large part of a country’s economy is the trade that occurs between themselves and other countries from around the world. What information might be examined to measure trade for any given country? Economies What makes up an economy? What “economic resources” are important to the success of businesses in a country? production of goods, consumption of goods, trade of goods and services Land Resources Labour Resources Capital Resources Market Traditional How do each of the
economies operate? What affects how
they operate? Command Mixed --are the people who use their skills to produce goods and provide services for a given business. Without labour resources "people" business could NOT operate. --is the money that is used to purchase "capital goods" such as machinery to increase the production/output of a business in order to increase its wealth Entrepreneurship --is the resource "person" who displays the ability to recognize potential business opportunities and is able to gather the necessary resources to make a profit --are "raw materials (soil, water, forests, animals, minerals and energy sources" that are necessary to produce the products that will be sold to earn a profit. Tertiary Industries Secondary Industries Primary Industries --driven by profit

--prices are decided by supply and demand
--high supply and low demand = low $
--low supply and high demand = high $
--equal supply and demand = fair $

--at times face "economic depression" when factories/businesses close, and people lose their jobs

--government plays a role in the market economy to support businesses and industry

--can have a negative impact on the environment because the cost to be environmentally safe in too expensive. an industry where work is based on the harvesting of natural resources such as agriculture, mining and forestry. an industry where commercial products the will be sold to the consumer and other businesses will be made from the resources collected by the primary industry through manufacturing and construction (e.g., furniture companies who turn trees into piece of furniture) an industry where services are provided to the individual "consumers" or business to meet their needs/wants (e.g., LA Fitness, Utility Company) --profits, businesses are dependent on earning a profit.

--supply and demand
--high supply and low demand = low $
--low supply and high demand = high $
--equal supply and demand = fair $

-- "economic depression" when factories/businesses close, and people lose their jobs. This is a cycle because as people lose jobs then spend less and more businesses fail.

--government plays a role in the market economy to support businesses and industry

--cost of resources (land, labour, capital) --decisions about what is to be produced is based on the needs of the family or a small group for their survival

--profit is NOT a goal of this economy, Little money is used

--based on a hunting and gathering lifestyle, also subsistence farming (farms that used to feed the farmers family)

--exists in some religious and cultural groups but is slowly disappearing

--exists in some countries (mainly developing) where subsistence farming is still practised, extra food/animals not needed by the family is sold
--the needs of the family or small group

--cultural and religious values shape the decisions that are made

--the land that is used, as farmers often use land that would NOT be used by large farm producing for a "manufacturer".

--can be easily affect by the climate of the region --decisions made are NOT always made by individuals, companies, families or cultural groups

--production and distribution of goods/services is directed by one person OR a small group who form the government.

--some command economies are military dictatorships or nations at war. This exists in a few Asian and African countries.

--people live in poverty with little chance for education or access to healthcare. --the person/group in power (government)

--situation in the country, are they at war?

--cost of resources
--a mix of the command and market economies driven by profit but governed by the government

--other mixed economies are "traditional/market" where traditional economies come to the marketplace to sell their goods, "traditional/command" (5 Asian countries which are communist but because of large population would have difficulty moving away from the traditional economy based on subsistence agriculture), "market/command" the most common economy in existence (e.g., Canada)

--government plays a role in most mixed economies by taxing purchases that are made by individuals or businesses --state of the economy (i.e., is it in a depression?)

--wants of the individual "consumer"

What factors can affect/have an influence on industry?

--technological improvements that increase production and efficiency

--available natural resources
--available workforce
--strength of the market to sell goods or provide services to What might have an effect on a countries ability to trade? Value of Exports (Goods Traded) Value of Imports (Goods Purchased) Goods available for trade in order to obtain goods needed Trade Alliances, that allow participating countries to be free of taxes/tariffs on traded goods --Distance between trading countries
--Goods available for trade
--Purchasing power (Wealth) European Union, Organization of Petroleum Exporting Countries (OPEC), World Trading Organization (WTO), North American Free Trade Agreement (NAFTA) are all example of alliances and organizations meant to aid trade between countries. Level of Development
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