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Production costs

Production costs. Supply and Demand Competition Encourages efficient use of resources Want to lower prices to compete yet make a profit. Consumers . Consumer sovereignty Controlling the influence of the consumer Boycott. Economic Ups and Downs. Business Cycle. 1991-2001

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Production costs

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  1. Production costs • Supply and Demand • Competition • Encourages efficient use of resources • Want to lower prices to compete yet make a profit

  2. Consumers • Consumer sovereignty • Controlling the influence of the consumer • Boycott

  3. Economic Ups and Downs

  4. Business Cycle • 1991-2001 • Ups and downs of the economy • Follow a pattern • Peak • Contraction (recession) • Trough • Expansion

  5. Economic Extremes • Recession • Period of significant decline • Production > consumption • Depression • A major economic downturn • Recession can lead to a depression • Demand and prices • Unemployment

  6. Economic Extremes (con’t) • Inflation • Growth not always good • Prolonged rise in prices • Reduces purchasing power

  7. Factors Affecting Ups & Downs • Consumer confidence • Technological innovation • Government Policies • War

  8. The Economic Report Card • Gross Domestic Product (GDP) • Total value of goods and services produced in a country • Counted only when they are new • Compared year-to-year • Unemployment rate • Consumer Price Index (CPI) • Change in price over time

  9. The Government’s Role 3 Levels of Government 4 major roles in the US Economy Ensuring Economic Stability Regulating Economic Activity Redistributing Income Provide public goods and services

  10. Ensuring Economic Stability • 2 basic approaches • Fiscal • Monetary

  11. Regulating Economic Activity • Protecting: • Environment • Consumers • Workers • Promoting Competition • Monopoly (trust) • Antitrust laws

  12. Redistributing Income • Social Security and Medicare • Retirement • Survivors’ • Disability • Medicare • Unemployment Insurance • Public Assistance Programs • 9 main programs

  13. Provide public goods and services • National defense • Police and fire protection • Courts and correctional institutions • Public parks • Street, highway, and bridge construction • Public education • Public Transportation

  14. Research Activity • Temporary Assistance to Needy Families (TANF) • Supplemental Security Income (SSI) • Food Stamps • Supplemental Food Program for Women, Infants and Children (WIC) • National School Lunch and School Breakfast Programs • Food Distribution Program • Medicaid (not medicare) • State Children’s Health insurance Program • Housing Programs

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