Economics (ppt)

Economic Understandings

• SS4E1
• Use the basic concepts of trade, opportunity cost, specialization, voluntary exchange, productivity, and price incentives to illustrate historical events.

Hi! My name is Mrs. Econ and today I am going to teach you about economics.

• Hi! My name is Mrs. Econ and today I am going to teach you about economics.
• Economics is the study of the making, buying, and selling of goods or services.

Barter-Trade

• When the 13 colonies were founded, some people were good hunters, some were craftsmen, and some were farmers.
• In order to get things that a person needed to survive, one person might have traded one item for another item.
• This is known as voluntary exchange.

• I have 5 rabbits to trade. Want to trade with me?

What is voluntary exchange?

• People will trade if they both get something from it.
• The lady trades a jug of milk and 3 eggs for 5 rabbits.
• She needs the rabbits to make rabbit stew.
• She’ll use the rabbits’ skin to make a fur cap.
• The man’s family needs milk and eggs.

• Yes. I will trade my milk and eggs for your rabbits.

Let’s review voluntary exchange.

• Voluntary exchange helps both buyers and sellers.
• Voluntary exchange was used in the system of colonial trade. (barter)
• The colonists swapped goods that they had for things they needed.

• I’ll make your farming tools for 4 crates of apples.

• I’ll give you 4 crates of apples for farming tools.

• Both parties must benefit from the trade.

Trade was very important after the Revolutionary War ended.

• Under the Articles of Confederation, Congress had no power to make laws about trade.

• This turned out to be a big problem among the thirteen states.