Circular Flow Model in Economics
Explore the Circular Flow model representing productive resources, goods, services, and money payments in the economy. Dive into concepts like factor market, product market, and transactions within the economic system. See examples of transactions involving individuals and firms, and grasp the flow of money and resources in the market economy.
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Presentation Transcript
Circular Flow PRODUCTIVE RESOURCES, GOOD AND SERVICES, & MONEY PAYMENTS
Todays Agenda Objective: To understand and describe what the circular flow model represents in the economy. Essential Skill: Explicitly assess information and draw conclusions.
Update All assignments are as scheduled, except the test will now be Friday Primaries www.cnn.com/election
PPF Questions Answer the questions on the worksheet You may work with those around you if you want Be prepared to share your answers
Circular Flow Diagram Create a circular flow diagram using the terms listed on the sheet Include the * items as the four main players in the economy. Start by drawing pictures that symbolize the * items, and then label them. Connect the main players to one another with arrows going both directions. Use all the other items listed below to label those arrows that connect the main players to one another. On the back side of the diagram write a story that explains how money and resources and goods flow around the market economy.
Factor Market Taxes Purchase of goods/services Households Household income, interest Firm Gov t Taxes Product Market
where in the circular flow does the transaction take place? factor market product market
Christian buys a new Blu-Ray player at a local store.
Alexandra earns $8 per hour working a summer job at the spring factory.
Evan earns $25,000 in profit from his ownership in a bike shop.
Ariana makes Christmas ornaments to sell at a local flea market.
JessicaCorp builds a new factory and hires 1,500 new workers.
Definitions to Know Write these on the back of your circular flow chart Market: is not a place, but a collection of buyers and sellers, wherever they may be Macroeconomics: the study of the economy as a whole How economies grow How economies collapse How to grow without collapse Microeconomics: the study of how people make decisions and how those decisions affect others in the economy Any decision affecting an individual, or a small group/business
Micro or Macro? Answer the following questions to decide if they are examples of macro or micro economics
Top Ten Best-Selling Products of All Time See how many your team can name! Hint: Products can be movies, books, objects, toys/games, larger items, and music!
Top Ten Best Selling Products Play Station Liptor (blood pressure) Corolla Star Wars (all movies included) iPad Mario Brothers Franchise Michael Jackson s Thriller album Harry Potter (everything included) iPhone 10. Rubik s Cube 1. 2. 3. 4. 5. 6. 7. 8. 9. http://www.usatoday.com/story/money/business/2014/05/18/24-7-wall-st-the-best-selling-products-of-all-time/9223465/
