SOCIAL STUDIES 9 LESSON 1.1 ECONOMICS

definition of economics

how individuals, businesses, and societies manage limited resources to meet their needs and desires.

oikonomia

household management

Types of Poverty

Generational poverty, human capital theory, structural poverty, absolute poverty, and relative poverty

Generational Poverty

families living in poverty for two generations or longer

Human Capital Theory

assumes that individuals take actions that will likely increase their future earnings and overall well-being.

Structural Poverty

caused by societal structures and systems, rather than individual shortcomings

Absolute Poverty

a lack of resources that is life-threatening

Relative Poverty

poverty defined according to the living standards of the majority in any given society

Resources

inputs for producing goods and services

Types of Resources

land, labor, capital, entrepreneurship

land resources

natural resources like minerals, forests, and water

labor resources

human effort and skills

capital resources

man-made goods such as machinery and tools

entrepreneurship

innovation and management for new products or ideas

Scarcity

arises from finite resources and limitless human desires

Allocation

the action or process of allocating or distributing something.

Founder of modern economics

Adam Smith

What did Adam smith contribute to economics

Author of "Wealth of Nations" and created concept of gross domestic product (GDP)

Who created the Malthusian Theory?

Thomas Malthus

Malthusian Theory

human population outgrows agricultural production capabilities, resulting to becoming more prone to crisis

Opportunity Cost

value of the best alternative sacrificed when making a choice

Three Questions of Economics

What to produce? How to produce? For whom to produce?

Economic Systems

the methods societies use to distribute resources

Types of Economic Systems

Traditional, command, market, and mixed economy

Types of Market Economy

Feudalism, mercantilism, capitalism

Types of Command Economy

communism, socialism, fascism

Traditional Economy

-survival needs are produced through farming, hunting and gathering
-people make their own or share or trade goods

• bartering system

Command Economy

An economic system in which the government controls a country's economy.

Market Economy

production of goods and services is determined by the demand from consumers, competition, and are produced by private businesses

mixed economy

An economy in which private enterprise exists in combination with a considerable amount of government regulation and promotion.

Feudalism

A system of government based on landowners and tenants

Mercantilism

more exports than imports, gold and silver

Capitalism

An economic system based on private property and free enterprise, maximization of profits. limited government intervention

Socialism

resources of society, such as land, factories, and businesses, are owned by the individuals and state.

• redistribution of income to create equal class

• price control by government
  -high taxes

Communism

-no individual ownership, no social class, everyone equal in wealth
-government owns everything

• high taxes

fascism

-extreme nationalism
-supports a blend of both private and public ownership over the means of production

• dictator
  -importation is prohibited

microeconomics

the study of how individual households and firms make decisions and how they interact in markets

macroeconomics

the study of the economy as a whole, including topics such as inflation, unemployment, and economic growth