Intro to economics study guide

why does social studies even exist???

Scarcity  

• Basic factor that creates an economic system 

• Shortage must be handled properly to keep society balanced  

• People's wants exceed availability  

• Government tries to balance limited resources 

• Satisfying unlimited wants with limited resources 

Addressing scarcity 

• What - is wanted or needed 

• How - will it be produced 

• Who - will get it 

How are people’s needs are supplied 

• Land 

• Labour  

• Capital 

Land 

• Materials found the in natural environment  

• Renewable (can be replaced fully) and non-renewable (exist in limited quantities and never replaced) 

Labour 

Physical and mental effort needed to produce goods and services 

Capital  

Money people own or borrow used to buy equipment, tools, or other resources to make goods and services 

Economic system  

• Solve the basic problem of scarcity  

• Different ideas about how to organize an economy makes different economic systems 

• Organized by a continuum based on values of society and the government  

Ownership 

• Publicly owned – controlled by government and paid by taxpayers 

• Privately owned – controlled by businesses and individuals 

Centrally planned economy  

• Resources are publicly owned 

• Government makes decisions on how to use resources  

• Consumers have little influence on economy  

• Far left 

• Prices set by government 

Market/free economy 

• Everything is privately owned 

• far right

• Individuals make decisions on how to use resources 

• Consumers drive economic decisions depending on what’s being bought 

Mixed economy 

• Mix of publicly and privately owned businesses 

• Individuals and government both make decisions on what to produce 

• Both have influence on economic decision making 

Crown corporation 

• Company owned by the Canadian government to provide goods and services 

• Provides essential services 

• Promotes economic development 

• Support Canadian culture and identity 

• Creates jobs to support economy and culture through taxpayers' money 

Public good 

• What is best for the interest for all of society 

• Many people disagree due to different perspectives 

Consumer 

Buys product or service 

Producer 

Provides product or service 

Good  

The thing being produced or manufactured 

Service  

• Doing something for you 

• Might not be an object 

Supply  

• How much of a product or service there is 

• Producer willing to produce something at a certain price 

Demand 

• How much consumers want a product or service and how their willing to pay for it 

• How much the product can be sold at for that price 

Equilibrium  

Supply and demand are equal 

Supply and demand 

Cause-and-effect relationship 

Competition  

Rivalry among different producers to sell the most products 

Monopoly  

• They are rare because they need government support  

• Do not need to be competitive in price 

• Government funds the money they lose 

• Prices regulated by government 

• Ex: Canada post (crown corporation)  

Government intervention in market economy 

• To keep people safe 

• Collect taxes for common good (ex: healthcare) 

• Impose laws for fair competition, making base a price 

Founding principle 

• Canada: “Peace, order and good government” 

• America: “Life, liberty, and the pursuit of happiness” 

Government interventions in economies 

• Healthcare  

• Social programs 

• Ownership 

• Economic protection 

• Competition laws 

• Consumer safety initiatives 

Jobs and our economy  

• Economic decisions impacts job availability 

• Supply and demand can affect job availability, making opportunities or challenges 

Labour unions  

• Organization of wage earners (workers) 

• Makes wages reasonable and makes workplace safe 

• Can lobby (fight/convince for legislation) the government 

• Government can make favorable or unfavorable laws for unions 

• Can pressure employers about wages, hours, workplace safety 

• Strikes form pressure, they can refuse to do their job 

• Extreme cases, small strike can turn to general strike  

• Paying some wage towards union to help you out 

Collective bargaining 

• Negotiating as a group.  

• It is the key right established by workers unions for workers 

• Charter of rights and freedom protects collective bargaining