chamberlain. circular flow activity directions create two columns of words organize the columns into...
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Chamberlain
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Circular Flow Activity DirectionsCreate two columns of wordsOrganize the columns into “like” terms
Businesses and Individuals/ConsumersThink – what do these people provide?
Once you have organized the terms – match the term to the term from the other column
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Circular Flow of a Market EconomyBusinesses IndividualsSupply Side
WagesInterest
Demand SideGoods and Services
Supply SideLaborCapital (Investments)
Demand SideMoney – pay for good or
service
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Supply and Demand Supply: Amount of a good or service sellers
are willing and able to offer at different pricesLaw of supply – As the price increases,
suppliers will increase the supply of a product Maximize profits
Demand: Amount of a good or service that buyers are willing to pay for a productLaw of Demand – As the price increases, the
demand will decrease
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Market Price• Market Price
– The most efficient price at which buyers and sellers agree to do business
– Equilibrium• Too Much Demand,
Too Little Supply – Shortage
• Too Little Demand, Too Much Supply - Surplus
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Plotting Supply and DemandSelling Price of the doll
Number supplied per week per store
Number requested per week per store
$1.00 35 530
$2.00 130 400
$4.00 320 140
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Burger-Rama Dolls
Selling Price
Supply Demand Results
$2.50 A 160 310 Shortage 150
$3.80 B 300 160 Surplus 140
Free C Over 600
$3.15 240 240 $3.15
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Supply and DemandJoe sells baseball
cards on the weekends. He is especially interested in Sammy Sosa cards. Here is his data from past weekends.
Create a graph using the data.
Price Supply of cards
Demand of cards
$1.40 10 90
$2.00 19 50
$3.00 42 25
$4.20 94 20
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Supply and DemandWhat is the market price (equilibrium)?
How much would be demanded and supplied at $3.25What are your results?
How much would be supplied and demanded at $1.75What are your results?
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Brainstorm in your group why people start or stop buying a product besides just changes in price?
Why would suppliers produce less or more of a project?
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Why would the demand for a product increase or decrease?Change in taste
United Colors of BennetonSubstitutes – Competition
Cheaper or better qualityNumber of consumers increases or decreasesComplement – enjoyment of one is enhanced by the
otherIncrease in demand of complement = increased demandIce cream: price drops, whip cream sales increase
Future price changes anticipated – weather or disasterMarketing – Young, old, cool, cutting edge
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Why would the supply of a product increase or decrease?Cost of Inputs change
Inputs – products/services used to make your product including labor, land, capital, marketing
More firms/businesses enter the market
Change in taste
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ElasticityRelationship between the demand for a
product and the change in price of a productBasically, if the price changes, how many
people will stop buying the product? At what point will you see greater changes?
Milk, Bread, Gas, and Toothpaste would be considered Inelastic
IN the short run – 6 months to a yearWhat products would you consider elastic?
If a candy bar goes up in price a nickel, how many more people will not demand it?
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Chapter 14 – Individual AssignmentsYou choose the order you want to complete them INDIVIDUAL Work! Any sharing or copying and both
parties will receive a Zero! I will come around and check off the work you complete
daily – you are not handing this work in – Complete the work and staple it together as a study guide
Section 2 and 3 questions – 20pointsArticle : Outsourcing - 20 pointsArticle: Get Healthy or Else – 20 PointsArticle: Walmart and Unions – 20 Points
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3 types of BusinessesSole Proprietorship
Partnership
Corporations
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Sole ProprietorshipWho owns?70% of all businesses are sole proprietorships
Examples?
Advantage?
Disadvantage?
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PartnershipWho owns?
Examples?
Advantage?
Disadvantage?
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CorporationResponsible for 85% of all the products and
services we useVery Large Business
No specific owner Company is controlled by a board of directors who
choose a CEO (Chief Executive Officer) to run the company
People like you and me can invest in a company by buying stocks or shares of the company Company will share profits with stockholders
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FranchiseMcDonalds: Sole Proprietorship and a
Corporation – HOW?Individuals buy the rights to build a McDonalds
from the corporationThe individual has certain legal requirements
that it must adhere to as far as McDonald’s Specials and Promotions
Corporation makes money on the McDonald’s products that the individual buys – the better the restaurant is doing the better both the individual and corporation do
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The Rights of Businesses“Get Healthy or Else”
Should a company be able to fire an employee if they do not or can not quit smoking
Matter of being business smart Companies pay millions in healthcare benefits The unhealthy cause the company’s insurance
premiums to riseIs this infringing on a person’s personal life?Obama and Clinton have planned to fix our
healthcare system to avoid issues like this. What do you think?
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LaborUS is losing its hold on the world as
providing the most qualified/educated workers willing to work very hard for their money.
Main issue – Labor competition overseas.“Outsourcing”
What is outsourcing? Why is outsourcing good for US economy?
Efficient Why is outsourcing bad for the US economy?
China and India may overtake us on the long run
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Compare the cost of laborYou are providing a company a service when you agree to
work for them…it just so happens that our labor is costing companies more and more each year.
China, India and Mexico are the equivalent to Walmart for laborAccountant: US, $60,000.00India, $4000.00
Garment worker: US, $6-10 an hour China, $.25
Factory work: US, $15 an hour Mexico, $2.00
Chip designer: US, $85,000.00 India, $12,000.00Financial Analyst: US, $85,000.00 India, $12,000.00
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In Defense of Labor1800’s – US Industrial Revolution
Machines increase speed of productionMasses head to cities for jobs in factoriesRise in wage labor
12-16 hour days – 7 days a week Dirty, Dangerous and Paid little
Leads to rise in Labor UnionsOrganization of workersGoal is to improve working conditions, wages
and workers’ rights
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Company and Union TacticsStrikeBoycottSlowdownSit-inDemonstrate
ScabsHired SecurityLock outYellow dog contractsBlack listed
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CompromiseCollective Bargaining
Process by which unions and businesses reach agreements Give and Take
Today – Union membership is fallingNot as powerful
Outsourcing Americans want cheap goods – Walmart
Many people look down on unions – cause wages to skyrocket, which causes the price of goods to increase
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WalmartProvides a model to the rest of the businesses
in the USDo not compromise with or allow unions in your
store Shut down the meat department in Texas
2007 revenue = $378 BillionMake workers sign yellow dog contractsGive workers tests to find indications of union
sympathizersBreak laws but it is cheaper to pay fines then
give workers benefits or allow unions