How Might Scarcity Divide Our World Or Bring It Together?

CP Economics Final 2018 Task: For this final, you will be demonstrating your final skill goal of the year: creating an original argument and supporting it with relevant evidence. In addition, you will continue to demonstrate your understanding, analyze evidence, breakdown essential questions, and conduct relevant research. Essential Question: How might scarcity divide our world or bring it together? Final Exam Review: Connecting Concepts to Concepts In the summative, you will be using our economic concepts from this year to help you answer different essential questions. To prepare you, in this step, you will connect specific economic concepts to each other. You will explain their relationships. All explanations must be in your own words. You should use your slides from previous units to help you construct your explanations. 1 Scarcity and Economic Systems (free market economy, centrally planned economy, mixed economy) An economy has limited resources and unlimited wants. Hence, the amount of resources available will not satisfy all the wants which lead to the concept of scarcity. As a result, there is need to for nations to determine how to distribute wealth and trade good and services. In the process of determining what to produce, who to manufacture and where to manufacture in order to maximize the use of the scarce resources, the concept of economic system arises. In a free market economy, people have the freedom to make their own choices. However, in a centrally placed economy, all the decisions are made by the government. Finally, a mixed economy involves both the public and private entities. 2 Economic Systems and Economic Values (growth, freedom, security, efficiency, equity) Economic value is the measure of the amount of benefit derived by an economic agent from the good and services provided. However, the commodities that are distributed or traded needs to be measured in order to determine the entity that will manufacture them at the lowest cost and at the same time achieving maximum benefits. Hence, the relationship between economic system and economic values. 3 The Law of Supply and the Law of Demand The law of supply states that an increase in supply reduces price. While the law of demand states that an increase in demand increases price. Hence, the two laws relates to each other as they help in determining the equilibrium price and quantity of a product or service in a competitive market structure. 4 Market Structure (perfect competition, monopolistic competition, oligopoly, monopoly) and Government Regulation The relationship between market structure and government regulation is that the government sets rules that are applied in the market structure to avoid the exploitation of consumers by companies. The degree of government intervention depends on the kind of the market structure and how firms within the market structure exploit consumers through unhealthy business practices such as setting high prices. 5 Business Organizations (sole proprietorship, partnerships, franchises, corporations) and Labor Goals Labor goals are set by the organization of workers to improve the welfare of the employees. The organization negotiates on the amount of remuneration to be paid to employees and the nature of their working environment. However, the degree of negotiation depends on the type of business organization. Therefore, there is a relationship between labor goals and business organizations in terms of the extent to which the union can negotiate with the employers in various business organizations. 6 Fiscal Policy and the Business Cycle Fiscal policies are instituted by the government to achieve a set objective such as to ensure that the economy grows. However, business cycle is a sequence of expansion and contraction within the economy. There are times when the economy is at boom and periods when it under recession and depression. Therefore, the government will implement fiscal policies that are intended to achieving the desired economic growth. 7 Monetary Policy and Unemployment/Inflation Monetary policies are implemented by the Central Bank of a nation to control the prices of goods and services. The strategy is achieved by changing the interest rates to influence borrowing or money supply to monitor prices. However, inflation is the state in the economy where the prices of goods and services are high. Hence, monetary policies will help in rectifying the situation. Moreover, unemployment is brought about by collapse of businesses due to fewer funds to expand their operations which are also corrected by monetary policies. 8 Comparative Advantage and Interdependence Comparative advantage is a situation where one country has an advantage in producing a product at a lower cost. While another nation produces a different product at a lower cost than the other. Therefore, each nation will specialize in producing the best product which it manufactures at the lowest cost and trade it with the other good that the other nation manufactures cheaply. As a result of the trade, the two countries will depend on each other. Hence, the concept of interdependence and its relationship to the concept of comparative advantage. 9 Free Trade and Trade Barriers Free trade is where two nations trade freely with each other without involving any quotas or taxes to be paid. However, trade barriers are obstacles that prevent a trade from taking place. The obstacles include variation in the language used and taxes. Therefore, the relationship between free trade and trade barriers is that there is no barrier to prevent one country from trading with the other in a free trade situation. Final Exam Review: Gathering Evidence For each of the concept groups above, you will now gather evidence of each in the real world. Use the Honors Students’ Lesson Plans, your previous slides and formative to summative processes to identify at least one piece of evidence that supports the connection you made in F7: Connecting Concepts to Concepts. In the tables below, identify a piece of evidence and explain how it helps support your explanation. 1 Scarcity and Economic Systems (free market economy, centrally planned economy, mixed economy) The control that the government has over public resources such as roads. There are several people who need to use the roads daily, while the number of roads available is inadequate to meet their demands. Therefore, the government will intervene to monitor the use of the roads, which renders the economic system a type of centrally planned economy. 2 Economic Systems and Economic Values (growth, freedom, security, efficiency, equity) People have the freedom to make their own choices in a mixed economy. Freedom is used as an economic value which measures the level of freedom that people have in a mixed econo...