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Copy of Economics

Introduction to Economics Notes: Grade 7

Tracy Shy

on 7 March 2011

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Transcript of Copy of Economics

ECONOMICS Definition: Study of Wealth and Scarcity Wants Vs. Needs What is Scarcity? We can't have everything we want or need, because things are limited. We have to make choices. What is a Want?
A want is something that is a luxury, and that you don't really need.
What are some examples? What is a Need?
Something that is essential to survive!
What are some examples? SUPPLY AND DEMAND! Supply:
How many goods or services are for sale at a certain price at a certain time. Law of Supply:
As prices go up, producers are willing to make more. As prices go down, producers tend to make less. Demand:
The ability and willingness of people to buy something. They must have money and want the item! Law of Demand:
As prices go up, people want less. As prices go down, people want more. Why do things cost what they cost? TYPES OF ECONOMIES Basic Questions of All Economies:
What to Produce?
How to Produce?
Who will buy the product? Traditional Economy How and what to produce is decided by what has been done in the past
Example = Ancient Civilizations
Died out with the development of the city (Specialization)
Barter system develops (trade of one item for another) Mixed Economy American Economic System
Someplace between a controlled (Command) economy and a pure free enterprise economy
Rules of supply and demand exist
Some government regulations exist Command Economy Production decisions are made by rulers
Rulers decide what will be produced with limited resources of society
Rulers also decide: who will work at what job, where work will take place, who will be paid what amount, who should get the goods produced in the economy, and how the goods or services will be produced
Example = Communism in the former Soviet Union
Limited Choices and Powerful Rulers! Market/Capitalist/Free Enterprise System: Easy to start your own enterprise or business
No pure market economy in the world today
No government rules apply to business
Buyers and sellers exchange goods/services based on laws of supply and demand
Law of Supply and Demand
Supply > Demand - Surplus
Supply < Demand - Shortage Key Word = Import
Import = bring items into a country Key Word = Export
Export = send (sell/trade) items to another country. Opportunity Cost The cost of passing up the next choice when making any decision

Interdependence When groups need each
other for survival Specialization When individuals or countries focus on producing certain
goods to be able to make them more efficiently and quickly
Diversify To add variety to something Consumer Buyer and user
of good and services Producer The maker of a good
or provider of a service Entrepreneur Person who begins a project
(usually a business), especially
when it takes initiative and has risk
Globalization Process where countries
are linked together through
Trade Barriers Embargo: A government order
preventing ships from entering
or leaving a country’s ports
Tariff: Tax or toll a
government places
on imports or exports Quota: an amount or
allotment allowed
or expected
Full transcript