the market phenomenon how is the market economic system and the circular flow model linked?
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The Market Phenomenon
How is the market economic system and the circular flow model linked?
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Objectives
• Understand and explain a market and its role in the market economic system
• Understand the “circular flow” of the market system by creating a graphic organizer of the flow
• Compose a narrative of the “circular flow”
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What 2 factors do ALL markets
share?
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Times Square, N.Y.C.• “district was a mecca for family-oriented tourism and entertainment…”
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Chandni Chowk, Delhi“…might actually be possible to get anything in Chandni Chowk: from made-to-order wedding dresses to exotic fruits to refurbished secondhand shoes.”
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Marrakech, Morocco• Largest market place in Africa
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Hong Kong• One of Asia’s largest markets• Serves the largest population in the world
• What factors did you see???
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4 Points of the “Circular Flow”
• All dependant on market activity to drive system…exchange goods/services
• Buyers and sellers to meet and exchange product1. Factor Market2. Business3. Product Market4. Individuals
– No specific order…all components critical
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Specifics…
• Factor markets:– Where individuals earn an income– 4 factors of production (C.E.L.L.) are bought and sold– You/your parents work place
• Product market:– Use income to acquire good/services here– $ returns to businesses (factor markets)
• This creates an infinite cycle where wages are exchanged and go on to create more and more goods/services
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Watch…
• https://www.youtube.com/watch?v=Hfz1bwK5C4o
• How are individuals and businesses (firms) linked in the market system?
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Act…• Create a graphic organizer of the “circular
flow”• Compose a brief narrative of the “flow”
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Intro…
• Exchange your narrative with someone near you
• Come up and grab a red, blue (or black) pen, and a highlighter
• Read your partners narrative and identify the 4 pieces of the circular flow model – Red for business– Blue for individual– Yellow for product market– Circle for factor market
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“FLOW” Activity
• Moving around the school to 2 different locations in order to highlight the “circular flow” of the market economy
• Complete the sheet as you move• Find the posted explanation of each location’s
relation to the “circular flow” and read it to your group
• 25 MINUTES TO COMPLETE!!
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Intro: Mock-market interaction
• Grab a sheet from the front and get into groups
• Read the directions and get startedObjective: • Understand the two types of markets • Understand how individuals and businesses
are both buyers and sellers
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Reflection Questions
• With a partner grab a white board, marker and eraser
• I will give out 1 point for the best answer to each question…winning pair will receive a prize
• Ready to begin?
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Question #1
• How does the market economic system and the “circular flow” overlap?
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Question #2
• How does your paycheck fit into our larger market economy?
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Question #3
• During the “Circular Flow” of Conestoga activity, your physical movement around the school was the equivalent of what in the real world?
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Question #4
• Where is the governments role in our market’s “circular flow”? Answer and give a specific example.
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Question #5
• How could a labor strike effect our community here in Berwyn?
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Question #6
• On a scale of 1-10, how important is freedom in a market economy?
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Question #7
• Which of the 4 pieces of the “circular flow” is the most crucial to the system?
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Question #8
• Explain the role a website like E-bay or Amazon plays in the “circular flow.”
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Question #9
• Command Example…• Why does a market system overcome the
command system’s shortcomings?
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Question #10
• Why is it important to understand the “circular flow” of our economy?