Economics Unit

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Economics Unit

• Chapter 10
• Economics Close to Home

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Economics

• The study of our efforts to satisfy our unlimited
  wants through the use of limited resources.
• Wants gt Resources Scarcity, the fundamental
  problem of economics!
• Scarcity forces us to make decisions
• What to produce?
• How to produce it?
• Who gets what is produced?
• Goods products, such as sugar, cars.
• Services hairstylist, taxi

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Opportunity Cost

• Opportunity cost is the loss involved in choosing
  one thing rather than another. It is the result
  of scarcity!
• For example, the opportunity cost of watching the
  hockey game is the opportunity lost of studying
  for your test!
• Buying the yellow shirt instead of the red one
  the opportunity cost of the yellow shirt is the
  opportunity lost of the red one.
• Sometimes as consumers we make the mistake of
  impulse buying, spur of the moment purchases,
  without considering opportunity cost.

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Supply and Demand

• Demand (consumers) the amount consumers are
  willing and able to buy at a particular price.
• Supply (producers) The amount producers are
  willing and able to produce at a particular price.

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Demand and Supply CurvesSee page 144 text
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Equilibrium Price

• Equilibrium Price refers to the price at which
  buyers and sellers agree.
• Best for the economy because it reduces waste.
  We sell what we produce!
• Law of Demand
• As price goes up, demand goes down
• As price goes down, demand goes up
• Law of Supply
• As price goes up, supply goes up
• As price goes down, supply goes down
• Hidden Market/Substitute Effect

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Investing

• Principal the original sum invested
• Interest money earned on the principal
  invested, (based on interest rate)
• Compound Interest interest on your interest

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Chapter 11The Atlantic Economy

• Sectors of Our Economy
• Primary Industry
• Secondary Industry
• Tertiary Industry
• Quaternary Industry

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Primary Industry

• PRIMARY INDUSTRY activities in which people
  use, extract, harvest natural resources such as
  water, soil, fish, animals, plants, trees.
• Products are only slightly altered before they
  are used.
• Ex fishing, farming, mining, agriculture.
• Natural Resources materials found in the natural
  environment that humans can use to satisfy their
  needs and wants.
• Natural resources formed the basis of the regions
  economy for centuries (100s of years). Some
  influence our culture ex. Fishing
• Today some primary industries are in decline but
  others remain important to the economy. A decline
  can be because of declining resources, a change
  in consumer demand, or competition from other
  countries.

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• Primary industry today is changing in the
  following ways
• fewer manual workers are needed
• use of technology
• higher skill level and education needed
• Fishing decline in ground fishing led to
  increase in aquaculture (fish farming).
• Forests protect the forest by assigning each
  province an allowable annual cut (AAC)
• - many factors are used to calculate this (p.
  162)
• Mining different types of mining are used to
  get minerals out of the ground.
• - minerals are manufactured into many things
• Farming includes 3 stages
• inputs anything needed to grow the crop
• process what farmers do to bring crops to
  maturity
• out puts crops produced and any waste

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Secondary Industry

• SECONDARY INDUSTRY process raw materials into
  finished goods.
• products are manufactured into goods that are
  substantially different from original materials
• goods are worth more (value added).
• Ex manufacturing, construction, transportation
  and utilities (hydro and gas)
• Related closely to primary industry.
• Ex fishing ? food processing, ship building

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TERTIARY INDUSTRY

• TERTIARY INDUSTRY enables customers to obtain
  and use finished products
• workers provide services rather than goods
• ex sales, repairs, banking, insurance, tourism,
  hospitality, clerks, doctors

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QUARTERNARY INDUSTRY

• QUARTERNARY INDUSTRY involves specialized
  technology
• Ex of workers research scientists, computer
  software designers.
• Often grouped with Tertiary industry as workers
  provide services rather than goods.

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Linking them together

• Both tertiary and quaternary are linked to
  primary and secondary sectors.
• Ex fishing rely on weather forecasters for
  ocean conditions
• rely on mechanics and technicians to maintain
  equipment
• plant owners rely on marketing specialists to
  help find new opportunities to sell their fish

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GDP and GNP

• GDP or Gross Domestic Product is the total value
  of goods and services produced within a given
  area in a given year.
• Used to measure economic growth!
• GNP or Gross National Product is the total value
  of all goods and services produced by Canada in a
  given year, including that of Canadian companies
  operating in other countries.
• Entrepreneurs people who turn ideas in
  businesses.

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Chapter 12 Our Economic Outlook

• Sabian Cymbals, NB

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Trickle Down Effect
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Seasonal Work

• We have a resource based economy so many jobs are
  seasonal, where workers are employed for only
  part of the year.

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Out migration The Brain Drain
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Transfer Payments

• HavesBC, Alberta, NL
• to
• Have Nots All other provinces
• Equal access for all Canadians to health care and
  education, the 2 biggest expenditures for every
  province.
• AKA equalization payments, it negates economic
  diversity.

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ACOA and NAFTA