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## **What is Economics?** - Economics is considered the science of choice. - We want more that what we can afford - Our inability to afford everything we want is called **scarcity**. This is a universal experience that everyone usually faces within their lifetime. - What you can afford is limited by your income and the price that come with the physical items you desire - What governments can afford is based on how much taxes people pay - All physical items are limited by the productive resources available **Everything isn’t attainable!! Therefore we must make choices on how we want to spend our money and time.** - Choices often align with ones **Incentives** - **Incentives** is a reward that encourages an action or discourages someone. **Microeconomics:** - The study of choices that individuals and businesses make which therefore effects markets, influences the government and the overall societal picture. - Ex. How would a tax on online shopping affect amazon? **Macroeconomics** - The study of national economies and global economic performances. - Ex. Why does the unemployment rate in Canada fluctuate? ## Two Big Economic Questions - How do choices end up determining what, how, and for whom goods and services are produced? - Do choices made in the pursuit of self-interest also promote the social interest? ### What, How, and For whom? Goods and services are the objects people value and produve to satify wants. - Goods are physical objects - Services are tasks performed for people **What?** - What we produce across countries can vary overtime. **How?** - We use resources in order to produce goods and services called the **factors of production** - Land - Labor - Capital - Entrepreneurship - Land - The natural resources that are provided by the environment - Labor - The work time and effort people devote to producing goods and services - Depending on the quality we have to look at **human capital.** - This means that people who have studied and trained the trade will produce a higher quality of work. - Capital - The physical aspects such as tools, instruments, machines, buildings, etc. - Entrepreneurship - They are the drivers of economic progress and are constantly producing new ideas and how they analyze the risk and benefits. **For Whom?** - Who consumes the goods and services is dependent on peoples income and wealth. - People earn their wealth from… - Land earns rent - Labor earns wages - Capital earns interest - Entrepreneurship earns profit ## Self-Interest and Social Interest Self-Interest - You make choices that are the best available one to you. - How you feel influences your choices. Social Interest - If it is best for society as a whole **Efficiency and the Social Interest** - The goal is to be **efficient** - To have a balance - The struggle is that it is not possible to make someone better off without making someone else worse off. **Fair Shares and the Social Interest** - Four issues in today’s world puts some perspective into how we should look at the scenario. - Globalization - Information-age monopolies - Climate change - The gender pay gap **Globalization** - the expansion of international trade, borrowing, lending, and investment. - This is in the self-interest of firms as they can produce an item for a cheaper amount in another country. - This can cause job loss for the items origination in one country when it is produced somewhere else **Information-Age Monopolies** - The size and market power of these companies enables them to have the ability of pricing items higher than necessary - When a company has a popular brand name people also purchase the brand name when buying items from them - This means that people acknowledge a high end brand more than an unknown one. **Climate Change** - Burning fossil fuels to generate several areas of power causes a lot of carbon emissions. - When making the choice a company is making a self-interest choice to use these resources which further damages the land. **The Gender Pay Gap** - Part of it is how men are seen as doing higher paid jobs and women do lower ## The protest against Market Capitalism - Market capitalism is an economics system in which individuals own land and capital and are free to buy and sell land, capital, and goods and services in markets. - This generates a lot of wealth for a small percentage of people in the world - Centrally planned socialism is an economic system in which the governments owns all the land and capital, direct workers to jobs, and decides what, how, and for whom to produce. - Ex. The soviet union - Our economy today consists of a mixed economy ## The Economic Way of Thinking The six key ideas that define the economic way of thinking. - A choice is a tradeoff - People are making rational choices by comparing benefits and costs - Benefit is what you gain from something - Cost is what you must give up to get something - Most choices are “how much” choices made at the margin - Choices respond to incentives **A choice is a tradeoff** - This is an exchange of giving up one thing to get another - Due to scarcity we make the choices of what we must give up - For example do you go to a ball game or do you stay home and save the money you would have spent at the ball game. **Making a Rational Choice** - A rational choice is one that compares the costs and benefits and the achieves the greatest benefit over cost for the person making the choice. - Only the wants of the person’s desires become relevant to their choice. **Benefit: What you Gain** - The benefit is the game or pleasure that it brings and is determined by someone's preferences - Benefits vary largely like going to school or feeling happy you ordered a pizza - **Economists measure this benefit as the most that a person is willing to give up to get something.** **Cost: What You must Give Up** - The **opportunity cost** of something is the highest-valued alternative that must be given up to get it. **How Much? Choosing at the Margin** - The choice when allocating your time to certain things is making your choice at the margin - **Marginal benefit** is the benefit you receive when you increase an activity. - **Marginal cost** is the opportunity cost you incur when you an increase an activity. - You must compare both when making a decision **Choices Respond to Incentives** - The idea is that we can predict the self-interested choices that people will make **Positive Statements** - A positive statement might be right or wrong but can always be tested by fac checking it. **Normative Statements** - This statement relates to what should be and varies depending on its ability to be tested and someone internal opinion of the matter. **Unscrambling Cause and Effect** - An economics model is a description of some aspect pf the economic world that includes only those features that are needed for the purpose at hand. **Economics as Policy Adviser** - Economics is used as a toolkit for advising governments and businesses and for making personal choices. - Economics can be used to clarify the goal and choice.ov
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Usa, 1919-41 Refers To The Period In American History From 1919 To 1941, Characterized By Significant Economic, Social, And Political Changes. Wall Street Crash The Catastrophic Stock Market Crash That Occurred In 1929, Leading To The Great Depression In The United States And Worldwide. New Deal Refers To The Series Of Programs And Policies Implemented By President Franklin D. Roosevelt In Response To The Great Depression To Stimulate Economic Recovery And Provide Relief To Americans. League Of Nations An International Organization Established After World War I To Promote Peace And Cooperation Among Countries, But Failed To Prevent Aggression And Conflicts. Isolationism Refers To The Foreign Policy Approach Adopted By The United States After World War I, Characterized By Avoiding Entanglement In Foreign Affairs And Focusing On Domestic Issues. Economic Boom The Period Of Rapid Economic Growth, Expansion Of Industries, Increased Consumer Spending, And Overall Prosperity Experienced In The 1920s In The United States. Stock Market A Platform Where Shares Of Publicly Traded Companies Are Bought And Sold, Playing A Significant Role In The Economy And Investment Activities. Great Depression The Severe Economic Downturn That Began With The Wall Street Crash In 1929 And Lasted Throughout The 1930s, Leading To High Unemployment, Poverty, And Economic Hardship. Raw Materials Basic Materials Used In Industrial Production, Such As Coal, Oil, And Cotton, Essential For Manufacturing And Economic Development. First World War A Global Conflict That Took Place From 1914 To 1918, Involving Many Of The World'S Great Powers. Us System Of Government Refers To The Federal System In The United States Where Individual States Have Certain Powers While The Federal Government Handles National Affairs. Constitution The Foundational Document That Outlines The Structure Of The Government And The Rights Of Its Citizens In The United States. Supreme Court The Highest Court In The United States, Responsible For Interpreting The Constitution And Ensuring The Legality Of Government Actions. Republicans One Of The Two Major Political Parties In The United States, Known For Their Beliefs In Laissez-Faire Economics, Protective Tariffs, And Low Taxation. Democrats The Other Major Political Party In The United States, Often More Willing To Intervene In Everyday Life And Support Higher Taxation For Social Programs. Trusts Large Corporations That Dominated Industries In The United States During The Early 20th Century. Mass Production A Method Of Producing Goods In Large Quantities, Leading To Lower Costs And Increased Availability To Consumers. Mass Production The Manufacturing Of Goods In Large Quantities Through Techniques Like Assembly Lines, Allowing For Increased Efficiency And Lower Costs. Henry Ford An American Industrialist Who Revolutionized Car Production With The Introduction Of The Moving Assembly Line, Particularly Known For The Model T. Production Line A Method Of Manufacturing Where A Product Moves Through Various Stations, With Each Worker Performing A Specific Task, Leading To Faster Production. Model T A Car Model Produced By Ford Motor Company, Known For Being The First Affordable Automobile, With Over 15 Million Units Produced Between 1908 And 1925. International Harvester Trucks A Company That Produced Trucks, Benefiting From The New Roads And The Growth Of The Truck Industry In The Early 20th Century. Mass Consumption The Widespread Purchasing Of Goods By The Public, Essential For Industries Relying On Mass Production To Thrive. Industrial Efficiency Movement A Movement Promoting Efficient Production Methods And Management Practices To Increase Productivity In Industries. Chain Store A Type Of Retail Store That Operates Multiple Locations, Offering The Same Products Across Different Regions, Contributing To The Growth Of Consumerism In The 1920s. Hire Purchase A System Allowing Consumers To Buy Goods On Credit, Paying For Them Over Time, Which Became Popular For Purchasing Items Like Radios And Cars In The 1920s. Over-Production The Situation Where More Goods Are Produced Than Demanded By The Market, Leading To Surpluses And Falling Prices. Declining Exports Reduction In The Amount Of Goods Sold To Other Countries, Often Due To Economic Conditions Or Trade Barriers. New Competitors Emerging Rivals In The Market That Pose A Challenge To Existing Businesses, Often Due To Increased Efficiency Or Lower Costs. Falling Prices Decrease In The Prices Of Goods Or Services, Usually Due To Oversupply Or Reduced Demand. Rural Banks Financial Institutions Located In Rural Areas That Provide Banking Services To Farmers And Residents In The Countryside. Farm Bankruptcies Legal Status Of Being Unable To Pay Debts As A Farmer, Leading To Financial Insolvency And Potential Loss Of Assets. Unemployment The State Of Being Without A Job, Especially When Actively Seeking Work. Herbert Hoover The 31st President Of The United States Who Served From 1929 To 1933. Chicago One Of America'S Biggest Cities In The 1920s, Known For Its Steel, Meat, And Clothing Industries. Roaring Twenties A Term Used To Describe The 1920s In The United States, Characterized By Dynamic Business Growth, Mass Consumption, And Societal Changes. Laissez-Faire An Economic Theory That Advocates Minimal Government Intervention In The Economy. Mass Production The Production Of Large Quantities Of Standardized Products, Often Using Assembly Line Techniques. Prohibition The Nationwide Constitutional Ban On The Production, Importation, Transportation, And Sale Of Alcoholic Beverages In The United States From 1920 To 1933. Jazz Age Refers To The Period In The 1920s Characterized By The Rise Of Jazz Music, New Dances Like The Charleston, And Changing Styles Of Behavior Epitomized By The Flapper Image. Flapper A Term Used To Describe Young Women In The 1920s Who Defied Traditional Norms By Wearing Short Dresses, Makeup, Smoking In Public, And Embracing A More Liberated Lifestyle. Jazz Music A Genre Of Music That Emerged In The Early 20th Century, Characterized By Improvisation, Syncopation, And A Lively Rhythm, Which Became A Symbol Of The Jazz Age In The 1920s. Silent Movies Films Produced Before 1927 That Did Not Have Synchronized Sound, Relying On Visual Storytelling, Music, And Intertitles To Convey The Plot To The Audience. Talkies Refers To Movies With Synchronized Sound, Which Became Popular After The Release Of "The Jazz Singer" In 1927, Marking A Significant Shift In The Film Industry. Hollywood A Neighborhood In Los Angeles That Became The Center Of The American Film Industry, Producing A Large Number Of Movies During The 1920s And Becoming Synonymous With The Glamour Of The Entertainment World. Middle-Class Women In The Usa Before The First World War, Middle-Class Women In The Usa Were Expected To Lead Restricted Lives, Wearing Very Restrictive Clothes, Behaving Politely, Not Wearing Make-Up, Having Strictly Controlled Relationships With Men, Needing A Chaperone When Going Out With A Boyfriend, Refraining From Participating In Sports Or Smoking In Public, And Being Mostly Housewives With Limited Job Opportunities. Flappers Flappers In The 1920s Were Controversial Figures Who Challenged Traditional Norms By Wearing Short Skirts, Bobbed Hair, Daring Clothes, Makeup, And Engaging In Public Behaviors Like Smoking, Drinking, Driving Cars Without A Chaperone, And Kissing In Public. Immigration The Act Of Individuals Moving Into A Country To Settle There Permanently. Intolerance Unwillingness To Accept Or Respect Different Opinions Or Beliefs. Racism Prejudice, Discrimination, Or Antagonism Directed Against Someone Of A Different Race Based On The Belief That One'S Own Race Is Superior. Melting Pot A Metaphor For A Society Where Different Cultures And Races Blend Together Harmoniously. Red Scare A Period Of Fear And Hysteria Over The Perceived Threat Of Communism In The United States In The Early 20th Century. Bolshevism A Faction Of The Marxist Russian Social Democratic Labour Party Which Eventually Became The Communist Party Of The Soviet Union. Anarchists Individuals Who Believe In The Abolition Of All Government And The Organization Of Society On A Voluntary, Cooperative Basis Without Recourse To Force Or Compulsion. J The First Director Of The Federal Bureau Of Investigation (Fbi) Of The United States. Deportation The Action Of Expelling A Foreigner From A Country, Typically For Having Committed A Crime Or Overstaying A Visa. Sacco And Vanzetti Italian Americans Arrested In 1920 On Suspicion Of Armed Robbery And Murder, Known For Their Anarchist Beliefs And Unjust Conviction. Red Scare Period Of Anti-Communist Hysteria In The United States In The Early 20th Century, Leading To The Persecution Of Individuals With Radical Beliefs. Immigration Quotas System Introduced In 1924 To Limit The Number Of Immigrants Entering The Usa, Favoring Those From North-West Europe And Excluding Asians. Ku Klux Klan White Supremacy Movement Using Violence To Intimidate African Americans, Revived In The Early 20th Century And Influential In The 1920s. Jim Crow Discriminatory Laws And Practices Enforcing Racial Segregation And White Supremacy In The Southern United States, Particularly Targeting African Americans. Lynchings Acts Of Violence, Especially Hanging Without Trial, Carried Out By Mobs Against African Americans, Jews, Catholics, And Immigrants In The Early 20th Century. Strange Fruit Poem Written By Abel Meeropol Inspired By A Lynching Incident, Highlighting The Violence And Racism Faced By African Americans In The Usa. Birth Of A Nation Controversial Film Released In 1915 Glorifying The Ku Klux Klan And Perpetuating Racist Stereotypes, Contributing To The Revival Of The Klan In The Early 20th Century. Lynching The Act Of Murdering Someone By Extrajudicial Mob Action, Particularly Prevalent Against African Americans In The Early 20th Century. Harlem Renaissance A Cultural Movement In The 1920s Centered In Harlem, New York, Where African American Artists, Musicians, And Writers Flourished. Naacp National Association For The Advancement Of Colored People, Founded By W.E.B. Dubois In 1919 To Fight Against Racial Segregation Laws And Lynching. Marcus Garvey Founder Of The Universal Negro Improvement Association (Unia) And Advocate For African Americans To Be Proud Of Their Race And To Establish Their Own Businesses. Civil Rights Movement Efforts By African Americans To Gain Equal Rights And End Racial Discrimination, Including Legal Segregation And Lynching, In The United States. Native Americans The Original Settlers Of The North American Continent Who Faced A Significant Decline In Population And Were Forced To Move To Reservations During The Rapid Expansion Of The Usa In The Nineteenth Century. Reservations Designated Areas Where Native Americans Were Relocated To Live, Often In The Midwest, After Being Displaced From Their Traditional Lands. Merriam Report A Report From 1928 That Proposed Widespread Improvements To The Laws Relating To Native Americans, Leading To Reforms Under Roosevelt'S New Deal In 1934. Monkey Trial A Trial In The 1920s That Centered Around The Teaching Of Evolution In Schools, Highlighting The Clash Between Urban Beliefs In Evolution And Rural Fundamentalist Beliefs. Fundamentalists People, Particularly Strong In The 'Bible Belt' States, Who Held Literal Interpretations Of The Bible And Opposed The Teaching Of Evolution In Schools. Prohibition The Nationwide Ban On The Manufacture, Sale, And Transportation Of Alcohol In The Usa, Enforced By The Eighteenth Amendment To The Constitution In January 1920. Prohibition The Period From 1920 To 1933 In The United States When The Production, Sale, And Transportation Of Alcoholic Beverages Were Banned. Bootleggers Individuals Who Illegally Produced, Transported, Or Sold Alcohol During The Prohibition Era. Speakeasies Illegal Bars Or Establishments Where Alcoholic Beverages Were Sold And Consumed During Prohibition. Corruption The Dishonest Or Unethical Behavior, Especially Involving Bribery, That Was Prevalent Among Law Enforcement Officers And Officials During The Prohibition Era. Gangsters Criminals Who Profited From The Sale Of Illegal Alcohol During The Prohibition Era, Often Associated With Organized Crime And Violence. Prohibition The Nationwide Ban On The Manufacture, Sale, And Transportation Of Alcoholic Beverages In The United States From 1920 To 1933. Al Capone Infamous Chicago Gangster Boss During The Prohibition Era, Known For His Violent Reign And Control Over Illegal Activities In The City. Bootlegger Individuals Who Illegally Produced, Smuggled, Or Sold Alcoholic Beverages During The Prohibition Era. Speakeasies Illicit Establishments That Sold Alcoholic Beverages During The Prohibition Era, Often Hidden From Authorities And Requiring A Password For Entry. St A 1929 Gangland Murder In Chicago Where Seven Members Of Bugsy Moran'S Gang Were Killed By Al Capone'S Men In A Brutal And Public Manner. George Remus A Prominent Bootlegger During The Prohibition Era Who Amassed Wealth Through Illegal Alcohol Sales And Corrupt Practices. Organized Crime Criminal Activities Carried Out By Groups With A Formal Structure, Often Involving Illegal Businesses Like Bootlegging, Gambling, And Prostitution. Corruption Dishonest Or Fraudulent Conduct By Those In Power, Often Seen In Law Enforcement, Government Officials, And Politicians During The Prohibition Era. Franklin D The Democrat President Who Was Elected In 1932 And Played A Key Role In The Repeal Of Prohibition In December 1933. Wall Street Crash The Collapse Of The American Stock Market In 1929, Leading To A Severe Economic Depression. Speculation A Form Of Gambling Where Individuals Buy And Sell Shares Quickly To Make A Profit, Without Intending To Hold Onto The Shares For Long. Stock Market A Platform Where Shares Of Companies Are Bought And Sold, Such As Wall Street In The United States. Shareholders Investors Who Own A Share In A Company, Entitling Them To A Portion Of The Company'S Profits. Herbert Hoover The Republican President Of The United States During The Wall Street Crash And The Subsequent Great Depression. Depression A Prolonged Period Of Economic Downturn Characterized By High Unemployment, Low Consumer Spending, And A Decrease In Industrial Production. Roosevelt Refers To Franklin D. Roosevelt, Who Won The 1932 Presidential Election Following The Wall Street Crash And Implemented The New Deal To Address The Economic Crisis. Margin Buying Shares On Margin Means Putting Down Only A Percentage Of The Cash Needed To Buy Shares And Borrowing The Rest. Petticoat Line Nickname For Women Speculators Who Owned Over 50% Of The Pennsylvania Railroad During The Stock Market Boom. Bank Speculation Banks Getting Involved In Speculation By Lending Large Sums Of Money For Stock Market Investments, Contributing To The Market'S Instability.
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