Current Events:
'Era of deficit denial is over'
Cf. http://www.youtube.com/watch?v=b6y749wgyxg
Chapter 2: Economic Systems and Decision Making
Chapter Overviews
Section 1: Economic Systems
Economic systems help societies provide for the wants and needs of their people. Three major economic systems have evolved over the years: traditional, command, and market economies. In the traditional economy, the WHAT, HOW, and FOR WHOM questions are answered by tradition, customs, and even habits handed down from generation to generation. In a command economy, a central authority answers the three basic questions. In a market economy, decision making is decentralized with consumers and entrepreneurs playing a central role. Most economies in the world today feature some mix of traditional, command, and market economies.
Section 2: Evaluating Economic Performance
The seven major economic and social goals used to evaluate the performance of an economic system are economic freedom, economic efficiency, economic equity, economic security, full employment, price stability, and economic growth. If the system does not perform as people would like, people can lobby for laws to achieve their goals. One example would be the Social Security program that was enacted to achieve the goal of economic security.
Section 3: American Free Enterprise
Free enterprise, another term used to describe the American economy, refers to the competition that is allowed to flourish with a minimum of government interference. A capitalistic free enterprise economy has five important characteristics: economic freedom, voluntary exchange, private property rights, the profit motive, and competition. Another key component is the entrepreneur, who is the risk-taking individual in the economy that starts new businesses and undertakes new ways of doing things in search of profits. The consumer is sometimes thought of as being "king" or sovereign of the market, and government is involved in the economy primarily because people want it to be involved. Because of the government involvement as the protector, provider, regulator, and consumer, the American economy can also be described as a mixed economy, or a modified free enterprise economy.
Student Web Activity "The Inuit Society — The Importance of Tradition"
Cf. http://glencoe.mcgraw-hill.com/sites/007879997x/student_view0/unit1/chapter2/student_web_activities.html
Chapter 2: Economic Systems and Decision Making
Self-Check Quizzes
Cf. http://glencoe.mcgraw-hill.com/sites/007879997x/student_view0/unit1/chapter2/self-check_quizzes.html
ePuzzles and Games Drag and Drop
Cf. http://glencoe.mcgraw-hill.com/sites/007879997x/student_view0/unit1/chapter2/epuzzles_and_games.html
Vocabulary eFlashcards
Cf. http://www.glencoe.com/qe/efcsec.php?qi=21814
In-Motion Animations: The Spectrum of Mixed Economies
Cf. http://glencoe.mcgraw-hill.com/sites/007879997x/student_view0/unit1/chapter2/in-motion_animations.html
Section 1: Economic Systems
Chapter 2, Section 1 - Reading Strategy
Chapter 2, Section 1 - Review
Cf. http://glencoe.mcgraw-hill.com/sites/007879997x/student_view0/unit1/chapter2/section1/interactive_graphic_organizers.html
Section 2: Evaluating Economic Performance: Interactive Graphic Organizers
Cf. http://glencoe.mcgraw-hill.com/sites/007879997x/student_view0/unit1/chapter2/section2/
Section 3: American Free Enterprise: Interactive Graphic Organizers
Cf. http://glencoe.mcgraw-hill.com/sites/007879997x/student_view0/unit1/chapter2/section3/
Unit 2
Prices and Markets
Chapter 4: Demand
Chapter Overviews
Section 1: What Is Demand?
Demand is easy to understand because it involves only two variables—the price and quantity of a specific product at a given point in time. Demand does not always stay the same and can be determined by a demand schedule, which shows the various quantities demanded of a particular product at all prices that might prevail in the market at a given time. The Law of Demand states that when the price of something goes up, the quantity demanded goes down, and vice versa.
Section 2: Factors Affecting Demand
Only a change in price can cause a change in quantity demanded. When the price goes up, less is demanded; when the price goes down, more is demanded. The following factors affect demand: the income effect and the substitution effect. Furthermore, demand can change because of changes in the determinants of demand: consumer income, consumer tastes, the price of related goods, expectations, and the number of consumers.
Section 3: Elasticity of Demand
Elasticity is a general measure of responsiveness— an important cause-and-effect relationship in economics. There are three different forms of elasticity: elastic demand, inelastic demand, and unit elastic demand. To estimate elasticity, it is useful to look at the impact of a price change on total expenditures, or the amount that consumers spend on a product at a particular price. This is sometimes called the total expenditures test. The answers to three questions help determine a product's demand elasticity. Can the purchase be delayed? Are adequate substitutes available? Does the purchase use a large portion of income?
Student Web Activity
Cf. http://glencoe.mcgraw-hill.com/sites/007879997x/student_view0/unit2/chapter4/student_web_activities.html
Self-Check Quizzes
Cf. http://glencoe.mcgraw-hill.com/sites/007879997x/student_view0/unit2/chapter4/self-check_quizzes.html
Crossword Game
Cf. http://www.glencoe.com/olc_games/game_engine/content/gln_ss/epp_12/ch04/index.html
Vocabulary eFlashcards
Cf. http://www.glencoe.com/qe/efcsec.php?qi=21822
In-Motion Animations
Individual and Market Demand Curves
Cf. http://glencoe.com/sites/common_assets/socialstudies/in_motion_08/epp/EPP_p94.swf
Change in Demand
Cf. http://glencoe.com/sites/common_assets/socialstudies/in_motion_08/epp/EPP_p99.swf
(Supply and) Demand, 4:52
Supply and Demand Screen shot 1
Why It Matters
The Big Idea
Section 1 What is Demand?
The demand for a good or service is defined to be the relationship that exists between the price of the good and the quantity demanded in a given time period, ceteris paribus (other things being equal).
Guide to Reading
Section Preview
Content Vocabulary
demand
microeconomics
market economy
demand schedule
demand curve
Deriving the Demand Curve, 2:09
Law of Demand
Introduction to the law of demand, and what it means, 4:44
market demand curve
marginal utility
diminishing marginal utility
Diminishing Marginal Utility, 4:15
Academic Vocabulary
prevail
inversely
Reading Strategy
Products in the News
Wrist Watch
An Introduction to Demand
Main Idea
Economics and You
Demand Illustrated
The Individual Demand Schedule
The Individual Demand Curve
Reading Check
Interpreting
How do you react to a change in the price of an item? How does this illustrate the concept of demand?
The Law of Demand
Main Idea
Economics and You
Why We Call It a "Law"
The Market Demand Curve
Reading Check
Explaining
How does the market demand curve reflect the Law of Demand?
Demand and Marginal Utility
Main Idea
Economics and You
Reading Check
Describing
How does the principle of diminishing marginal utility explain the price we pay for another unit of a good or service?
Review
HW email to gmsmith@shanahan.org or hand in hard copy.
The Chapter 2 Test is Thursday.
Cf. http://shanawiki.wikispaces.com/Honors+Business+Economics+Chapter+2+Test+Prep+Page+Fall+2010
Wednesday HW
1. p. 93, How does this situation reflect the Law of Demand?
