Unit 1: The Economy and You Chapter 1: Basic Economic Concepts Chapter 2:Economic Resources and Systems Chapter 3: Economic Activity in a Changing World Chapter 4: Business Ethics and Social Responsibility Unit 1 Essential questions Describe economic activity and how it affects everyday life. What is the difference between a want and a need? How do businesses satisfy wants and needs? Why must societies make decisions about what to produce?
How do societies choose what to produce? How is economic activity measured? What are the phases of the business cycle? Why is it important for businesses to behave in an ethical manor? What does it mean for a business to be socially responsible? Chapter 1: Basic Economic Concepts learning goals
State the difference between wants and needs Describe how resources limit the number of wants people and businesses can satisfy Explain how to use the decision-making process to make the most of your resources Explain how profit and competition motivate business List the activities businesses undertake when developing products and services Explain how business impacts your and how you impact business
Key Vocabulary Wants Market research Needs Consumer Goods
Services Resources Business Profit Competition This is going to be the beginning of your business dictionary. This is a year-long assignment which I can check at any time, so make sure it
is up to date. Make sure that the dictionary is in alphabetical order and each word is labeled with the chapter where the word was found in, as well as the definition and one example of the word. Introduction to Business Math Calculate cost to buy 100 shares of Apple inc., Bank of America, and Yahoo Inc. as of today. What is the value of a companys stock called in the market? Which company has the highest value in the market? A Look at Wants and Needs Businesses make money by offering goods and services to satisfy the
wants and needs of consumers and other businesses. In this way, wants and needs drive the US economy. Things I need to survive include _____________. Things I want include ____________ List 5 examples of each. Compare your list with a partners to see any similarities and differences A Look at Wants and Needs You have $25 to buy something on Amazon.com, assume no shipping or taxes, what would you buy?
Create a list at your table of the things you NEED then create a list of the things you WANT Next create a list for the wants and needs of a business in general. Download- Anticipation Guide Principles of Finance Circle whether you agree or disagree, and your reason as to why. We will go over the I learned section together. Public vs. private wants and needs Public wants and similar to public utilities and services Highways, schools, libraries, parks, etc. Private wants are similar to the private sector businesses
Subsidy on foreign goods Higher wages for the individual Satisfying wants and needs The business market place consists of goods and services used to meet the wants and needs of the consumer What companies produce goods? What companies produce services? Resources are used by businesses to supply these wants and needs
What are some resources needed to create a smart phone? What are some resources needed to advertise a product? Ethics in business You work as an event planner for a local company. You are in charge of hiring a caterer for the companys 10th anniversary celebration. You have bids from four caterers in town. One of the bids is from a caterer who is an old friend. Their bid is higher than the other three. Would your relationship with the caterer affect the company you would hire? Why? Assignment Confidentiality Agreements
A confidentiality agreement is a contract that requires the employee or contractor not to reveal information that they acquire while working for an employer or client. Research several agreements online to compare and contrast. Create a list with the similarities and difference between the agreements. Make a few comments as to which one seems harsher, were you surprised at the language, and how would you like to need a confidentiality agreement to go to work? Making the most of your resources What term is used to maximize your outputs with the minimum amount of inputs? Use the following 5 steps to answer the following question:
You found a $50 on the ground. You go on a shopping spree to get anything you want for $50. The day after you finish your best friend comes up to you in tears describing how they lost a $50 bill from their birthday. What do you do? 1. Identify the situation 2. Identify possible course of action 3. Determine the pros and cons 4. Make a decision 5.
Evaluate your decision Making the most of your resources In making a house hold budget, you determine that your basic needs require 75% of your monthly income. The items you listed as wants cost another 15%. If your monthly income is $2,500, how much are you spending on wants? How much do you have left to save? Creating a Presentation Presentation requirements: Note cards to project your voice and not talk to the board Use proper citations
Keep slides uncluttered, but use appropriate graphics, fonts, and colors Needs and the Environment We live in a very diverse climate with changing seasons and dynamic temperatures that vary between 100o and 0o F. Pick a geographical area, anywhere in the world. It could be a city, state, region, country, area as long as it is defined. Now describe the wants and needs of the people in this environment 5 slides (not including the title or citations) Note cards Business casual
Rubric-presentation 5 vocab words from the chapter are to be used during the presentation Business Activities Anticipation for business activities: At your table come up with one product you would like to analyze What resources are needed to create this product? What goods?
What services? How does it get to the store shelf? Why do businesses produce overlapping products? For example, why do so many stores sell bread? How to define business What defines business? The ability to make a profit What are some businesses that you patronize?
Why do you patronize these specific businesses? What would motivate anyone to start or maintain a business? The ability to make a profit List 5 successful entrepreneurs who started a business and what their company is called The significance of competition Companies can produce whatever they want, however they want Specific advantages based on pricing, ideas, production, efficiency, quality, service, etc.
Target market- a group of people identified as those most likely to become customers Why do the best athletes and most talented actors make the most money? How come you can buy bread at so many locations? Why are there so many different brands of smart phones? Business Activities Identify a need or want that needs to be satisfied
Evaluate demand of products or services Acquire start-up money and capital Manage production Create a marketing plan Maintain good records or the business Assignment: Presentation Research a unique product or service that you have never heard of
Who created the product or service? What does the product or service do? Is there a company associated with this product or service? Is it successful? Can we buy this product/ how much does it cost? What is the target market for the product? Would you or your classmates be willing to buy this product?
How do you fit into business? As of right now you are considered a consumer Does business have a duty to supply your demands, or should a business create a supply to help create your demand? If you could purchase just 1 item in the world, that is for sale, what would you buy? Business careers Go to the link: http://www.bls.gov/ooh/. Click on the A-Z Index and enter the search term tomorrows jobs Write a 1 page report about the topic. Conclude the paper with a list of things that you can do now to prepare yourself for this occupation.
Chapter 1 Quiz Vocab review Chapter 2: Economic Resources and Systems Explain how scarcity requires individuals and nations to make decisions about resources Describe the four factors of production Describe the three basic economic questions each country must answer to make decisions about using its resources
Contrast the way a market economy and a command economy answer the three economic questions Key vocabulary Scarcity Economic systems Factors of Production Market economy Natural resources
Price Labor resources Supply Capital resources Demand Entrepreneurial resource
Economic Decision making Main factor governing production is scarcity What are some abundant resources? Scarce resources? Consumers are considered to have unlimited wants mixed with a limited supply What are some decisions that you personally made that were governed by the concept of scarcity Factors of Production Natural resources
Labor resources Capital resources Entrepreneurial resources What are the factors of production that go into cheese? Factors of Production What are some natural resources that are found in the US? What type of labor is found in the US?
How are capital resources different from capital? List 5 successful Entrepreneurs from other countries and what they did. Economic Systems Scarcity of economic resources forces every country to develop an economic system that determines how resources will be used. Each system has advantages and disadvantages. Economics studies how individuals and groups of individuals strive to satisfy their needs and wants by making choices. Who, what, when, where, why, and how
Finding Natural Resources List 3 companies that primarily specialize in natural resource extraction What natural resources do they extract? Write a 1 page article about one of the companies and their products/ services Try include the share price and ticker symbol. Types of Economies Market Supply and demand
Range of prices Command Central authority makes key economic decisions Government dictates supply and price Equilibrium price Shortage
Surplus No competition Competition Low innovation Low monetary motivation Types of economies Mixed economies
Combination of a market and command economy Governments can pick and choose what features of each theory they will provide Online assignment Go to CIA factbook Download- Comparative systems worksheet Fill out the worksheet comparing the three countries Answer the following questions using examples from your research.
How can the presence or absence of natural resources and arable land affect a nation's economy, regardless of the type of economic system? How can life expectancy and literacy rates affect the quality of labor in the economy? How can fertility rates affect the use of scarce resources? Online assignment How can GDP per capita and poverty rates indicate standards of living in each system? How can the size of the industrial/service sector and the agriculture employment rate indicate the level of industrialization?
How can electricity, communication, and transportation facilities indicate the potential for industrial growth? Considering the lack of natural resources, the labor problems, and the lack of capital and little industrialization of developing countries, how can developing countries develop? (Hint: Look at Economy - Overview for Chad). Presentation You are starting your own country. Your limitations are 1 coastline available to an ocean and 5 natural resources of your choosing. You can tailor the rest of your country to suit your needs as a government choosing an economic system.
What system would you install? Why? What would you produce? What would you keep under government control? What would you allow to be a private enterprise? 1 Fun fact about your country Chapter 2 Quiz Concentration game
Chapter 3: Economic Activity in a Changing World Describe the four types of economic shifts the United States has experienced Describe what is shown by GDP, unemployment rate, rate of inflation, and national debt. Explain how individuals and the government influence the economy Describe the four stages of the business cycle Key vocab Gross Domestic Product
Depression Standard of living Recovery Inflation Deflation Stagflation
Interest rate $7,500 7% $7,450 8% $8,200 5% Interest (Price x Interest rate) Total value ((price x (1+interest rate) Net or Newspapers
On page 39 of your textbook read the reader and case study then fill out the worksheet How has this shift changed the way we receive our news information?? The Changing Us Economy Throughout the years, the US economic system has changed. Each change affected what was produced and how people were employed. To gauge the health of our economic system, we use a variety of economic indicators In the 1600s we bartered goods and services
In the 1700s farming revolutionized civilization and allowed for cities In the mid-1850s the Industrial Revolution started In the 1900s information starts to move at a rapid pace to spur innovation Today we are mostly technology based, what will be the change of the future? How is our Economy Doing? 6 Key economic indicators 1. Gross Domestic Product
2. The Consumer price index 3. Industrial production 4. Interest rates 5. Non-farm payroll 6. Unemployment rate How is our economy doing? Gross Domestic Product (GDP)- measures the dollar value of all goods and
services produced in the U.S. economy in one year. This is measured by the Department of Commerce Bureau of Economic Analysis Add the spending in the consumer, investment (firms), government, and foreign (exports minus imports) sectors We must remove the effects of inflation from current GDP to compare the current figures to GDP numbers from other years. Real GDP is the current GDP divided by the GDP price deflator. The real GDP is one of the most important indicators of economic performance.
A rise in real GDP indicates economic growth, while a fall in real GDP indicates economic decline How is Our Economy Doing? The consumer price index compares the value of a basket of goods for urban customers over time. An examples would be bread, milk, cereal, some vegetables, and some fruit This index is compared month-to-month, year-over-year, or its trend. This is kept by the Bureau of Labor and Statistics
This is usually a lagging indicator of economic health How is our Economy Doing? Industrial Production measures the output of American industry. The Federal Reserve Board of Governors measures Industrial Production by calculating the manufacturing output in the consumer goods, business equipment, construction supplies, materials, manufacturing, mining, and utility industries. Production is calculated in each sector monthly, and the percentage change in output is reported as Industrial Production. Durable goods, such as cars, appliances, and furniture, as well as
construction supplies, tend to be more sensitive to economic changes than are other manufacturing products. Generally, Industrial Production increases during economic growth and falls during periods of economic decline How is our Economy Doing? The Ten-Year Treasury Interest Rate measures the percentage return investors receive on U.S. Treasury bonds. The Federal Reserve Board of Governors measures Ten-Year Treasury Interest Rates, as determined daily in the bond market. Treasury Interest Rates can be indicative of changes in other longterm interest rates such as mortgages and long-term business loans. A decline in interest rates can precede increased investment
spending to promote economic growth; high interest rates can lead to lower levels of investment and a decline in the rate of growth How is our Economy Doing? The Change in Non-farm Payroll measures the number of people employed by companies and government. The Department of Labor Bureau of Labor Statistics surveys approximately 390,000 establishments to count the number of people employed each month, and the change from the previous month in the number of employed people is reported as the Change in Nonfarm Payrolls. Non-farm Payroll generally rises during economic growth and falls during economic decline. How is our Economy Doing?
The Unemployment Rate measures the percentage of people in the labor force who were not working during the week of the survey, but had specifically looked for work within the previous four weeks (unless they were waiting to be recalled from layoff, in which case they need not have been looking for work to be counted as unemployed). The Department of Labor Bureau of Labor Statistics surveys thousands of Americans each month to calculate the size of the labor force (those working plus those not working, but seeking work) and the unemployment rate (the unemployed divided by the labor force). The number of people unemployed as a percentage of the labor force is reported each month as the Unemployment Rate. The Unemployment Rate generally falls during economic growth and rises during economic decline Answer the following
1. Explain what Real Gross Domestic Product growth statistics measure. 2. Explain what Consumer Price Index statistics measure. 3. Explain what Industrial Production statistics measure. 4. Explain what Interest Rate statistics measure 5. Explain what Change in Non-farm payroll statistics measure 6. Explain what Unemployment Rate statistics measure
7. How does knowledge of these statistics help us to understand how the economy is doing? 8. Looking at the current data, determine if we are experiencing growth or decline. Assignments List explanations of frictional, seasonal, structural, and cyclical unemployment in the state of New Jersey. Include information on the New Jerseys and the United States unemployment levels of the last 10 years. Draw some conclusions as to why the levels are the way they are and how NJs compares to the US over time. Finally compare these rates to the rates of unemployment in Japan.
1 page, double spaced, times new roman, 12 pt. font, 1" margins. Ethics in business You are the purchasing agent for a large furniture manufacturer. You have received several bids from lumber companies for a supply of teak, a very dense and decay resistant type of wood. The lowest bid comes from a lumber company that has been known for not placing a strong emphasis on local environmental concerns, especially resource depletion, when it cuts down trees. How would the lumber companys reputation affect your decision? The Business Cycle In a market economy, there is an economic cycle, which includes four stages: prosperity, recession, depression, recovery. There are also the four stages in the business cycle.
The government and congress enact laws to influence fiscal policy How would this cycle work in sports? Spending tax payers money and creating a balanced budget The Federal Reserve (The Fed) regulates the amount of money in circulation, controlling interest rates, and controlling how much money banks can loan out. The Business Cycle Prosperity- low unemployment, high production of goods and services, high levels of investment,
Recession- 2 consecutive quarters of negative growth in the economy Recovery- the economy starts to grow, unemployment lowers, and production increases Depression- high unemployment, and low production of goods and services October 29, 1929 Black Tuesday Beginning of the Great Depression 1929-1933 GDP fell $103B to $55B
Unemployment went from 1.6M to 12.8M Wages went from $.55 to $.05 In March 1933 a bank holiday was declared to prevent a panic Where are we right now??? Assignment Research the Tennessee Valley Authority What is it? How did it come about?
What purpose does it serve in society today. Assignment Find unemployment statistics for 1933, 1944, 1955, 1966, 1977, 1988, 1999, 2010. Present this information in an Excel graph. Explain the shape and levels of unemployment over time and what events may have shaped our economy On the Occupational Handbook web site search for the job of economist. Write a report on possible jobs for an economist as well as salary, and future employment opportunities. How can you prepare yourself for this occupation. Economist Profile Research famous economists
You will create a short presentation on the life of the economist including Biography Schooling Employment Economic theory/beliefs List of Publications Chapter 3 Quiz
Fill-in-the-blank Chapter 4: Business ethics and Social Responsibility Define ethics and business ethics Describe why ethical behavior is good for business List the steps for dealing with an ethical dilemma Define what is meant by the social responsibility of business Key vocab
Ethics Business ethics Code of ethics Sweatshop Conflict of interest Business Math Calculating the Future value of money
You made $4,000 one summer working various jobs. You have two options: one spend all the money or save and invest the money. What are the benefits of spending all $4,000? What about saving and investing? Calculate the future value of your money assuming a 5% annually compounding interest rate after 50 years. FV=PV(1+interest rate)^time The Nature of Ethics
What would you do if you found a copy of your final exam in the hallway? What would you do if you found a diamond ring in a restaurant? Ethics are moral principles by which people conduct themselves personally, socially, and professionally. Business ethics are rules that guide the behavior of a business and its employees. Some cultures have different ideas for ethics. In the United States, bribery is highly illegal and unethical. In India bribery in encouraged Laws and Ethics Ethics involve moral principles that govern conduct
Laws involve rules for conduct that may be used to punish violators March 25, 1911 the Triangle Shirtwaist factory Company in NYC had a fire which killed 146 workers- mostly young immigrant female workers Termed a sweatshop The Occupational Safety and Health Administration (OSHA) which is a division of the US Department of Labor now oversees workplace safety and rules. Assignment Look up how business practices and ethics are expected in the US business world
Now go to another country and see how the same business practices are set up Some things to compare are timeliness, meeting etiquette, dress, meeting format, and finally negotiating a deal or contract (bribe, incentives, strictly good business practices, nepotism) Prepare a presentation going over the different practices and how they compare and contrast. Include where you think it is easier to conduct business as well as where would YOU personally like to conduct your business Internet research Look up a code of ethics for your favorite company
Compare and contrast the code with some one at your table. What do you notice is in both codes? What are some of the differences in the code of ethics between companies? Based on the code of ethics, which company would you rather work for? Ethical Decision Making 1. Identify the ethical dilemma 2. Discover alternative actions
3. Decide who might be affected 4. List the probable effects of the alternatives 5. Select the best alternative Social Responsibility Is it the duty of a business to do what is best for the good of society? Producing goods and services that are beneficial to society and providing jobs for people are not sufficient for a business to be considered socially responsible. They are expected to do more. Some examples are that the LA times uses recycled paper and Automakers are starting to make hybrid cars that create less emissions
Why are businesses held to such a standard? Does the government do this? Or even individuals? The Equal Pay act of 1964 requires that men and women be paid the same wages for doing equal work The Americans with Disabilities Act bans discrimination against people with physical and mental disabilities Social Responsibility Employers owe it to their employees to take care of them financially and at the work site At the end of the day you will always have people work for you and happiness is
directly related to retention and productivity. Businesses are usually based in a community and have a responsibility to help out with the local area since it is mutually beneficial The real owner of the business is the shareholders, creditors, and out right owners. The whole point of investing in a company is to see it get better and create value Companies represent their financial performance to the public so they can choose to invest or not Sarbanes-Oxley Act Social Responsibility
In pairs, research companies with socially responsible mandates in their code of conduct. I would like to know: What is the socially responsible act and its impact to the company and community? Why is the company trying to be socially responsible? How does this socially responsible act help/hurt the company and community?
What are the costs to the company of being socially responsible (label intrinsic and extrinsic costs)? What if the company did not do the socially responsible act? How would this change public perception? 1 Fun fact about the company in general. Thematic Project Research trends that are affecting businesses and careers and create a presentation about them. These trends include the rise of globalization, the evolution of technology, and the increasing importance of cultural diversity. Choose a business or career that interests you
Preview business trends that are effecting the business or career Research how different business trends are specifically influenced by these changing trends Develop your presentation Chapter 4 Quiz Concentration game Unit 1 Essential questions Describe economic activity and how it affects everyday life.
What is the difference between a want and a need? How do businesses satisfy wants and needs? Why must societies make decisions about what to produce? How do societies choose what to produce? How is economic activity measured? What are the phases of the business cycle?
Why is it important for businesses to behave in an ethical manor? What does it mean for a business to be socially responsible?
Cooper AJP, Lettis S, Chapman CL, Evans SJW, Waller PC, Shakir S, Payvandi N and Murray AB (2008), Developing tools for the safety specification in risk management plans: lessons learned from a pilot project. Pharmacoepidemiology and Drug Safety, 17: 445-454....
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