ib chapter2
DESCRIPTION
TRANSCRIPT
ENGLAND
GERMANY
FRANCE
DENMARKSWEDEN
PORTUGAL
2-12-1 Economics and Decision Making
2-22-2 Basics of Economics
2-32-3 Economic Systems
2-42-4 Achieving Economic Development
2-52-5 Resources Satisfy Needs
InternationalBusinessChapter2
Our Global Economy[P.26-55]
InternationalBusinessChapter2
Describe the basic economic problem. List the steps of the decision-making
process.
InternationalBusinessChapter2-1
Scarcity refers to the limited resources available to satisfy the unlimited needs and wants of people.
Economics is the study of how people choose to use limited resources to satisfy their unlimited needs and wants.
InternationalBusinessChapter2-1The Basic Economic Problem
Coping with scarcityMaking choices
InternationalBusinessChapter2-1Making Economic Decisions
Every time we decide how to use the time, money or energy we’re making an
economic decision
InternationalBusinessChapter2-1
What do I need or want.
How can I have that.
What are the advantages or disadvantages in each case.
Based on #3 what is the best option.
Do what have to be done
Did it solve the problem?
InternationalBusinessChapter2-1The Decision-Making Process
Describe how the market sets prices. Explain the causes of inflation.
http://www.slideshare.net/lntrullin/supply-and-demand-1184484
InternationalBusinessChapter2-2Basics of Economics
Supply is the relationship between the amount of a good or service that businesses are willing and able to make available and the price.
Demand is the relationship between the amount of a good or service that consumers are willing and able to purchase and the price.
Market price is the point at which supply and demand cross.
InternationalBusinessChapter2-2Price-Setting Activities
Market Price Is Set by Supply and Demand
Amount of Stuffed Animals
Pric
e pe
r an
imal
Market Price Is Set by Supply and Demand
InternationalBusinessChapter2-2Price-Setting Activities
Market Price Is Set by Supply and Demand
Amount of Stuffed Animals
Pric
e pe
r an
imal
Product
Price
Market Price Is Set by Supply and Demand
InternationalBusinessChapter2-2Price-Setting Activities
D S
$100
$80
$60
$40
$20
$10
$00 20 40 80 160 320
Product
Price
Market Price Is Set by Supply and Demand
InternationalBusinessChapter2-2Price-Setting Activities
D S
$100
$80
$60
$40
$20
$10
$00 20 40 80 160 320
Product
Price
Market Price Is Set by Supply and Demand
InternationalBusinessChapter2-2Price-Setting Activities
DS
$100
$80
$60
$40
$20
$10
$00 20 40 80 160 320
InflationDemand-pull inflationCost-push inflation
InternationalBusinessChapter2-2Changing Prices
InflationDemand-pull inflationCost-push inflation
InternationalBusinessChapter2-2Changing Prices
Name the three main factors of production. Understand how different countries make economic
decisions.
InternationalBusinessChapter2-3Economic Systems
InternationalBusinessChapter2-3Economic Resources Satisfy Needs
CapitalResources
HumanResources
NaturalResources
ProductionFactors
Also known as land, these resources are the raw materials that come from the earth, from the water, and from the air. Iron, gold, silver, agricultural products, rivers, and oxygen are examples of natural resources.
These items are used in the production of goods and services consumed by individuals, businesses, and governments.
InternationalBusinessChapter2-3Economic Resources Satisfy Needs
Also known as labor, these resources are the people who work to create goods and services.
While technology has changed or eliminated certain tasks previously performed by people, new types of work are continually being created.
InternationalBusinessChapter2-3Economic Resources Satisfy Needs
Also called capital, these resources include buildings, money, equipment, and factories used in the production process.
These items are expensive and are used over several years by business organizations.
InternationalBusinessChapter2-3Economic Resources Satisfy Needs
The economic choices of a country relate to three basic questions:
1.1.What goods and services are to be produced?
2.2.How should the goods and services be produced?
3.3.For whom should the goods and services be produced?
InternationalBusinessChapter2-3Economic Resources Satisfy Needs
Command Economies Market Economies
Private propertyProfit motiveFree, competitive marketplace
Mixed Economies
InternationalBusinessChapter2-3Economic Resources Satisfy Needs
Describe the factors that affect economic development.
Identify the different levels of economic development.
InternationalBusinessChapter2-4
TechnologyAgricultural
Dependency
Literacy
DevelopmentFactors
Low literacyLimited
technologyAgricultural or
mining economy
Improving literacy
Improving technology
Decreasing dependence on agriculture or mining
High literacyModern
technologyIndustrial
economy
Less-Developed Country
Developing Country
Industrialized Country
InternationalBusinessChapter2-4Levels of Economic Development
Discuss economic principles that explain the need for international trade.
Identify various measures of economic progress and development.
InternationalBusinessChapter2-5The Economics of Foreign Trade
AbsolutAdvantage
a country can produce a good or service at a lower cost than other countries
ComparativeAdvantage
exists when a country can produce a good or service with more efficiency than other countries.
InternationalBusinessChapter2-5The Economics of Foreign Trade
Measure of ProductionGross domestic product (GDP)Gross national product (GNP)
InternationalBusinessChapter2-5Measuring Economic Progress
Measures the output of goods produce in the country
Measures the total value of all goods and services produced by the resources of a country
International Trade ActivityBalance of tradeForeign exchange rateForeign debt
InternationalBusinessChapter2-5Measuring Economic Progress
The differences between exports and imports
The value of the money in relation to other currencies
The amount of money the country owes to other countries
Other Economic MeasurementsConsumer price index (CPI)Unemployment rate
InternationalBusinessChapter2-5Measuring Economic Progress
Help consumers to make buying decisions. This measures inflation.
Indicator of a country situation. No work, no money, no buying…
Read the Newspaper!!!!!!!
Find an article that involves International Business
Get ready to talk about it next class…
One page.
Write your name.
Elaborate:
How International Business affects you