Grade 11 Economics

For Mrs. Wilson's Grade 11 Economic Education class, Hudson High School.
Written by Sean Weeks: Web site:  www.scybolt.com  email/msn

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Module 1
1.1.2

How are human needs and wants fulfilled?
1. Human needs and wants are fulfilled by producing goods and services.
a) Goods are tangible meaning they can be seen and touched.
b) Services are intangible ex: Education and legal advice

2. Goods and services are produced by using resources

What are resources?
1. Three kinds of resources are:

a) human
b) capital
c) natural

2. Human resources are also called labor, which can be physical or mental.
3. Capital resources are man-made resources that help production. Ex: tools, palletizers
4. Natural resources are God's gifts of nature, and include forests, water, and minerals
5. These three are called factors of production because they are used to produce goods and services.

Can resources meet our needs and wants?
-Resources are limited, wants are unlimited, this leads to scarcity.

What economic problems are caused by scarcity?

1. Resources are limited so societies face the problem of making choices of several options.
2. Society can make choices about what is produced (see 7.3)
3. The scarcer the goods, the more valuable they are.
4. The price of a particular good is the measure of scarcity. (see 1.1.3)

What are the consequences of choice?

When scarcity forces a choice of one good over another. The good that is not chosen is the opportunity cost. ex: You can go to the movies or a restaurant. If you choose the movie, the opportunity cost is the restaurant.

How is the price of goods and services determined?

1. Price determined by supply and demand
2. Supply is the quantity that is offered for sale
3. Demand is the quantity the consumers are willing to purchase
4. The price is the point where buyers and sellers agree

How does supply and demand affect the price?

1. Generally speaking:
Supply rises, prices fall
Supply drops, prices rise
Demand drops, prices fall

2. When prices are determined by supply and demand, the economy is called competitive market economy.

Besides supply and demand, what other factors determine price?

1. The number of sellers influences price

a) A monopoly is when there is only one seller; for example, Hydro-Quebec
b) An Oligopoly is when there are several sellers as in the case with oil companies and brewers. These firm decide on a price (chocolate bar companies)

2. Governments regulate the price of certain items such as telephones and liquor, and often control prices through government agencies; for example the Canadian Wheat Board, and the Milk Marketing Board.

What is a command economy?

A market economy is where prices and wages are determined by demand. (free-enterprise)

What are the characteristics of a command economy?

1. Private individuals are free to own businesses
2. Workers salaries are fixed by the government
3. The government controls what goods are produced
4. The economy is centrally planned, which means that power and authority are held by the government and not certain individuals.
5. Prices are fixed by the government

What is a mixed economy?

Ina mixed economy, economic decisions concerning buying and selling goods, services and labor are made, partly by the government and partly by individuals and private businesses.

What are the characteristics of a mixed economy?

1. A mixed economy contains features of both the market and common economies.
2. Both private individuals and the government own businesses.
3. Workers are sometimes free to negotiate their salaries and sometimes the government regulates them.
4. The government sometimes regulates prices
5. The government sometimes regulates what to products and how to produce it. Canada is an example of a mixed economy.

1.2

Distinguish the characteristics of a socio-economic organization.

1.2.1
What are the "economic factors"?

There are four economic factors:
1. Business (module 1)
2. Labour (module 2)
3. Consumers (module 3)
4. Government (module 4)

1.2.2
What does division of labour mean?

1. This is when workers have specialized skills and only do one part of the task.
2. Society organizes work into specialized tasks in order to improve labour productivity

1.2.3
Why is money important in the economy?

Money is:
a) a means of exchange
b) a store of value
c) a measure of value

1.2.4
How is economic activity measured?

1. The gross domestic product (GDP) measures the total value of all goods and services produced in this country.
2. The gross national product (GNP) is the total value of goods and services produced in a country plus what residents earn abroad.
3. The gross interior product (GIP) measures the value of goods and services produced in a province (such a Québec)

1.2.4
Are there any economic activities not included in the GNP, GDP or GIP ?

Bartering, under the table, and work that is not performed for money (such as household work) are not included.

Look up the meanings of these on pages 176-177 of your workbook.

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