jax history chapter 3 notes.pdf

Review of The Chapter ⮚ Goods include tangible items like food, clothing, cars, and houses, and services are the work or activities people perform, often for a fee. ⮚ A consumer is a person who satisfies a need or want by buying a good or service. ⮚ A produc...

Review of The Chapter ⮚ Goods include tangible items like food, clothing, cars, and houses, and services are the work or activities people perform, often for a fee. ⮚ A consumer is a person who satisfies a need or want by buying a good or service. ⮚ A producer is the person or group of people who use resources to make goods or provide services. ⮚ Natural resources come from nature and are useful to humans, including water, vegetation, and precious metals. ⮚ Human resources describe the persons who produce goods or services. ⮚ Capital resources are the tools used in the production of goods and services like machinery and factories. ⮚ Scarcity comes from trying to satisfy unlimited wants with limited resources, and it requires both consumers and producers to make choices with their limited resources. ⮚ The opportunity cost in decision-making is the value of the alternative you don’t choose. ⮚ Whenever a choice is made to have less of one thing to get more of something else, the result is called a trade-off. ⮚ Supply is the quantity of a good or service available for sale, and high supplies cause low prices while low supplies cause high prices. ⮚ Consumers usually want a higher supply so they don’t have to pay as much, and producers usually want a lower supply so they can charge more, though selling more at a lower price can make producers more money. ⮚ Demand describes the quantity of a good or service consumers are willing to buy, and it’s based on buyers wants, ability to pay for it, and willingness to pay for it. ⮚ Demand goes down as an item’s price rises, and as the price falls, demand goes up. ⮚ A traditional economy tends to be dependent on agriculture, uses bartering rather than money, and is often based on traditions, beliefs, and habits. ⮚ Change comes slowly in traditional economies, and a person is likely to do the same work their ancestors did. ⮚ A command economy sees the government direct the economy and control production  through rules, regulations, and restrictions. ⮚ A market economy sees decisions made by individuals and producers based on their desires, and the influence of supply and demand shapes what is produced and how it is produced. ⮚ Specialization is the practice of an individual or business focusing on a limited set of goods and services, and it can greatly improve productivity, especially when using an assembly line. ⮚ Voluntary exchange is the willing trade and transaction between a buyer and seller, and it is important at all levels of a market economy. ⮚ In a true market economy, there would be no laws or rules to protect consumers, workers, or businesses, so many societies have chosen to reduce the freedoms of a market economy in favor of these protections. ⮚ European arrival introduced commerce (buying and selling goods), both bartering and using money to trade. ⮚ The French king created a command economy in Louisiana to generate wealth through mercantilism (the idea that colonies exist to give wealth and power to the mother nation). ⮚ Colonists ended up making their own goods, grew their own crops, and traded with neighbors, and they engaged in smuggling (secret and illegal trade) with foreign nations. ⮚ When the United States acquired Louisiana, the profitable production of sugar and cotton turned them into important cash crops for the state. ⮚ By using the Mississippi River to transport goods, the port at New Orleans became the largest and busiest in the nation. ⮚ The factors of productions are natural resources, capital resources, human resources, and entrepreneurship. ⮚ Natural resources are products of Earth and its atmosphere, like air, water, and soil. ⮚ Louisiana’s rich soil has allowed agriculture and related businesses to flourish in the state, and the value of Louisiana’s crops were nearly $3 billion in 2022. ⮚ Louisiana’s natural resources also support their animal and animal product businesses, producing an estimated value of over $1 billion each year. ⮚ Both plants and animals are biological resources, which are renewable resources. ⮚ Since biological resources are farmed or hunted intensively, humans must play a role in renewing these resources. ⮚ Trees are a major cash crop for the state, with timber being harvesting in 59 of the 64 parishes. ⮚ Commercial fishing is one of the state’s most important economic activities. ⮚ Mineral resources are natural substances found inside Earth that are formed by slow, geological processes. ⮚ Oil is Louisiana’s most important mineral resources, with natural gas, sulfur, and salt being important, too. ⮚ Entrepreneurship is when people start their own businesses to market their own goods or services. ⮚ Entrepreneurs risk their time and money to try to create a successful business, which must sell goods or services to generate income. ⮚ The business also has expenses (costs) related to it, and a business is considered successful if it can earn a profit (the amount left after expenses are subtracted from income). ⮚ Tourism is a major service industry in Louisiana, with tourists’ activities enjoying the state’s culture adding billions of dollars to the state’s economy last year. ⮚ While small businesses often have fifty employees or less, large businesses can become large, complex business enterprises with many investors called a corporation. ⮚ The Gross Domestic Product (GDP), which measures the total value of goods and services produced in a nation in one year, is one of the most important economic indicators. ⮚ Another economic indicator, the Consumer Price Index (CPI), tracks and measures prices of goods and services every month. ⮚ The North American Free Trade Agreement (NAFTA) of 1994 removed trade restrictions with Canada and Mexico to make business across these borders easier.  Understanding The Facts 1. What are the building blocks of an economy? - resources 2. What are the two consequences of any economic choice? - opportunity benefit and opportunity cost 3. What are the three types of economic systems discussed in this chapter? - traditional economy, command economy, and market economy 4. Which company built Louisiana’s first oil refinery in 1909? - Standard Oil Company 5. Today, what are Louisiana’s four most profitable food crops? - sugar, cotton, rice, corn 6. In Louisiana, what is the most commonly harvested tree species? - pine 7. What types of Louisiana seafood are harvested by commercial fishermen and shipped all over the country? - crabs, oysters, and shrimp 8. How much of the nation’s natural gas deposits are in Louisiana? - more than 1/4 9. What type of industry is tourism? - service industry 10. Which index places a value on the goods and services produced in a country each year? - Consumer Price Index (CPI)