Stanley Economics

1. s Hi! My name is Stan
and today I am going
to teach you about
economics.
Economics is the
study of the making,
buying, and selling of
goods or services.

2. WHAT IS A NEED?
• We all need 4 basic things:
1. Food
2. Water
3. Clothing
4. Shelter

3. WHAT IS A WANT?
–Everything beyond our four
BASIC NEEDS are wants.
Can you name some of your wants?

4. What does barter mean?
s These days people usually
use money to get what they
want. Before there was
money, people had to barter
to get what they wanted. To
barter means “to trade”.

5. Want s Some people were
to good hunters, some
trade were craftsmen, and
with some were farmers.
me? One person might have
traded 1 sheep for milk
and eggs. Eventually
people wanted
something smaller to
carry around as money.
People started using
coins, as well as paper
money for trade.

6. s Yesterday, when I was
walking through town, I Bubba’s Ice Cream
decided to go to
“Bubba’s Ice Cream”.
My friend Diana works
there. Diana provides a
service to me because
she serves me ice
cream. A service is
any kind of work
performed for others.
The ice cream is a
good. A good is
something you can feel,
or any kind of
merchandise.

7. s Look 1)
at the
pictures on
the right. 2)
Which of
these pictures
3)
show goods
and which
4)
ones show
services?

8. s I asked Diana
for a double
I’m sorry
Stan! scoop of my
favorite kind of
ice cream: mint
chocolate chip.
“I am sorry
Stan, we are all
out of that
flavor”, she said.
Disappointed, I
settled for
vanilla.

9. What is supply and demand?
100
s The supply – (The
90 amount or quantity of a
80 good. ) of mint
70 chocolate chip ice
60
Gallons 50 cream at “Bubba’s” was
40 gone because it was in
30 high demand (wanted)
20 by many customers.
10
0 Look at the chart on the
vanilla choc. straw. mint left to see what flavors
choc. are in supply at
“Bubba’s Ice Cream”.
Flavors

10. s Diana asked me if I
would like my vanilla ice
cream in a cup or a
cone. I asked for a
cone. Diana said I was
lucky because there
was only one more cone
available. The little boy
behind me in line
wailed, “I wanted my ice
cream in a cone!” I told
Diana that he could
have the last cone, and
that I would have mine
in a dish with chocolate
syrup.

11. s There was a
scarcity of cones 1)
at Bubba’s.
Scarcity means
that there are
limited resources,
and therefore, 2)
people must
make choices.
Look at the
pictures on the
3)
right. Which
pictures show a
scarcity?

12. After I finished my ice cream, I said goodbye
to Diana and left. In the street I heard two
children singing a song to the tune of “You
Are My Sunshine”. It went like this:
s “We are consumers!
We are consumers!
We are so happy
when we can shop!
We are consuming
goods and services,
But our wants just
will not stop!”

13. I found myself singing along to the tune. When we
were finished singing I asked, “Where are you two
going?”
s The boy, whose name
was Andy, answered:
“We’ve saved up all Toy Store
our money and today
we are going to the
toy store! My sister
Sara wants to buy
either a rabbit or a
bike and I want to buy
either a basketball net
or a skateboard”.

14. What are producers and
consumers?
s The two children in this example are
consumers. A consumer is anyone
who buys a good or a service.
s The toy store owner in this example is a
producer. A producer is anyone who
makes or grows a good or performs a
service.

15. What is opportunity cost?
s Andy had $65.00 s Sara had enough
to spend at the money for either
toy store. The the rabbit or the
basketball net bike. She decided
cost $50.00, so to buy the bike
he had to buy that because then she
instead of the could ride bikes
skateboard, with her friends
which cost after school.
$75.00.

16. Opportunity s Opportunity cost is
Costs the process of
choosing one good
or service over
another. The item
that you don’t pick is
the opportunity
Purchases cost. The rabbit is
Sara’s opportunity
cost and the
skateboard is
Andy’s opportunity
cost.

17. What is a profit?
s What Andy didn’t realize when he
bought his basketball net was that
the toy store owner made a large
profit off of the sale. The toy store
owner spent $30.00 to make the
basketball net. Andy bought it for
$50.00. The toy store owner made
a profit of $20.00.

18. What is a loss?
s The toy store owner lost money
when Sara purchased the bike.
The owner made the bike for
$80.00, but sold it to Sara for
only $65.00. The toy store
owner lost $15.00.

19. After the children left the toy store I decided
to stay and have a look around. In the front of
the store there was a magnificent toy car.
s “Wow”, I exclaimed,
“what a neat car! Did
you make it yourself?”
The toy store owner
explained that it was
designed by a car
company, put together
by Mattel, a toy
company, and painted
by himself. “Painting is
my specialty”, he said.

20. What is specialization?
s The toy store owner counted on
others to do the necessary work to
construct the toys he sold, but then
he would paint the toys himself.
Specialization is when an
individual or a company
specializes in doing one part of a
task, and relies on others to
complete the other parts.

21. What is interdependence?
s Interdependence is when
people depend on one another.
Specialization results in
interdependence.

22. s I said goodbye to
Johnson Elementary School the toy store
owner and
continued on my
walk through
town. I passed
the elementary
school as I
rounded the
corner. Public
schools are
services provided
by the
government and
paid for by taxes.

23. What are taxes?
s Taxes are the money that the
government collects from individuals and
businesses to pay for public goods and
services.
s Andy and Sara both paid a 4.5% sales
tax when they bought their toys. Andy
paid an extra $2.25 in tax, for a total of
$52.25. Sara spent $2.93 in sales tax
for a total of $67.93.
s People also pay an income tax. An
income tax is a percentage of money
taken out of your income.

24. I passed the school and saw my friend
Cole walking down the street. “How are
you today?”, I asked Cole.
s “I am fantastic! I
just thought of a
new idea: a bowling
ball that expands as
you throw it so that it
is guaranteed to
knock down every
pin! I am going to
be famous!”

25. What is an entrepreneur?
s Cole is an entrepreneur. An
entrepreneur is a person who
comes up with a product or service,
or a better way to produce one. He
found the resources, the money,
and the time to produce a new
product.

26. s I wished Cole
good luck and
continued on
my way. On
the next two
blocks were two
popcorn stands.
They both
lowered their
prices!

27. What is free enterprise?
s Both popcorn stands
lowered their prices
because of free Popcorn
enterprise. Free $0.50---
enterprise means
competition.
Now
Companies compete $0.25!
with one another to get
the most customers,
and therefore, make the
most money. I decided Popcorn
to buy popcorn from the $0.50---
first popcorn stand, Now
because their price was $0.30!
the lowest.

28. Trade Barriers
• Physical Trade
Barriers
• are barriers to trade that are
geographical in nature.
They include such physical
features as Mountains,
Deserts, or if a country is
Land-locked.

29. Trade Barriers
• Political Trade Barriers
are barriers to trade that
government put in place
that block or inhibit
international trade
between countries.

30. The most common trade restrictions are:
•1) Tariffs- Which are taxes on imports.
• 2) Quotas- Which are limits on the
quantity that can be imported.
•3) Embargos- The refusal to allow any
type of trade with an entire country
•4) Sanctions- The limiting of trade
between countries or companies.

31. The most common trade restrictions are:
•Most barriers to trade are designed to prevent imports from
entering a country, and thus are used to protect domestic
producers from competition and domestic workers from
competition for their jobs.
•For this reason, a policy of high barriers to trade is referred to as
protectionism.
•However, economists point out that protectionism benefits
domestic firms by allowing them to charge higher prices to
consumers; in effect, protectionism is an implicit subsidy to the
protected firms, paid for by consumers.
•Although trade barriers may save the jobs of some domestic
workers, it destroys jobs in other, probably more efficient,
industries.

32. Economic
Systems
s There are four
different types of
Economic Systems
that governments
can choose to
answer the three
basic economic
questions.

33. A Country’s
Economic System must answer…
s 3 BASIC economic questions:
1. What/how much to produce,
2. How to produce,
3. For whom to produce
**How they answer these 3 questions will
determine how economically successful the
country is.

34. What is a Traditional Economy?
s When the people do the
same type of work that
their ancestors have
done and produce the
same goods this is
known as a Traditional
Economy.
s The land is past from
generation to
generation.
s They are generally
substance farmers that
produce just enough
food for their families to
eat.

35. Traditional Economy
• Tradition means you do the same thing over and over
again…
•People produce only what they need to survive and
very little, if anything extra.
•People inherit their jobs from their parents
–Example: if your father is a farmer, you will be a Farmer.
(there is little flexibility)
• This is the least developed (poorest) economic type
• There is never any change to modernize anything

36. What is a Command Economy?
s When the government
make all economic
decisions for a country
this is called a
Command Economy.
s The government owns
all of the manufacturing
factories, the farm land,
even the stores.
s This means there is no
competition. The
government decides
what to make, how
much to charge, and
even who can buy the
product.

37. Command (Socialist/Communist )
Economy
• Government owns what is being produced
• Business & property belongs to the government instead of private
ownership.
• The government decides what will be produced
• The goal is to have economic equality (so there is no rich or
no poor, everyone is the same)
• A shortage of good usually exists because the government
makes all choices
• Better jobs & products do not
receive more money= Unfair.

38. What is a Market Economy?
s When the producers and
consumers make all economic
decisions for a country, this is
called a Market Economy.
s Private individuals or
entrepreneurs own all of the
manufacturing factories, the
farm land, even the stores.
s This means there is constantly
competition to produce the
best product and sell it at the
best price.
s Supply and Demand control
the prices and production of
goods.

39. Market (Capitalist) Economy
s Private ownership of business & property
•Little government regulation (the government
doesn’t determine what to make)
• Freedom to make own choices
• Based on supply & demand
• Constantly changes to make better products
• More $ is offered for better products and workers

40. Mixed Economy
***Most Economic System are
MIXED (a little of all 3 economic
systems mixed together).***

41. Goodbye
s This completes my
lesson on
economics! I hope
you enjoyed the
tour. Economics is
an important part of
our lives. Think of
all of the ways you
use economics
everyday!

42. References
s Text Information:
s Think Quest Junior: “Econopolis” [Online] Available
http://tqjunior.advanced.org/3901/ Copyright 1997. Advanced
Network and Services, Inc.
s Pocket Dictionary for Economics. Available through Virginia
Commonwealth Center for Economic Education (no
copyright).
s The Economic Songbook: Old Tunes with an Economic
Twist. “We Are Consumers!” Copyright 1997, Martha C.
Hopkins. James Madison University Center for Economic
Education.
s Graphics Information:
s Microsoft Clip Gallery 3.0 (no sitations)
s #1 Free Clip Art. [Online Graphics]. Available
www.1cli[part.com/ Copyright 1999 #1Free Clip Art