6: Economic Systems Flashcards
What is economics?
The study of the production, distribution and consumption of goods and services
Economics encompasses various aspects of human behavior and societal organization.
Define economic system.
The way a society organizes the production, distribution and consumption of goods and services
Economic systems can vary widely between different societies.
What factors might influence decisions about the price of products?
Manufacturing costs, shipping costs, supply and demand, competition
Consideration of these factors helps businesses set competitive prices.
How are decisions made concerning what products to manufacture?
Based on consumer needs, market demand, and economic conditions
These decisions impact the overall quality of life for individuals.
To what extent do different economic systems affect quality of life?
They affect incomes, jobs, and government taxes
The economic systems in place directly influence citizens’ daily lives.
What factors should be considered when deciding how to spend income in a household?
Needs of family members, budget constraints, individual preferences
This can lead to discussions and debates within the household.
What are the focus questions regarding the economic systems of Canada and the United States?
- What values shape the mixed and market economies of Canada and the United States?
- How do economic decisions about scarcity, supply and demand, and competition affect individuals and groups?
These questions guide the exploration of economic systems in the chapter.
True or False: Economics only concerns the production of goods.
False
Economics also involves distribution and consumption.
Fill in the blank: Economics affects the incomes people make, the jobs they have, and the _______ they pay to the government.
taxes
Taxation is a crucial aspect of economic systems.
What issues may arise from economic decision-making?
Debates over spending priorities, impact on citizenship, and effects on identity and quality of life
These issues can lead to social and political discussions.
What is the definition of economy?
The resources and processes involved in the production, distribution, and consumption of goods and services.
What role do economic systems play in daily life?
They supply individuals with the goods and services they use every day.
What values shape the mixed and market economies of Canada and the United States?
The principles and values underlying these economies.
What does this section begin with?
A comic that presents a situation you may have encountered.
What are the key topics explored in this section?
The principles within an economic system and the differences between mixed and market economies in Canada and the U.S.
What should readers consider while reading this section?
How economic decision making affects quality of life.
What influences the variety of products and services available to consumers?
Economic decision making.
What factors influence the price of products and services?
Economic decision making.
What impacts the quality of products and their effect on the environment?
Economic decision making.
As a consumer, what do your possessions reflect?
What you value and your decisions about what to buy.
What does your ownership of items indicate?
What is available for you to buy based on how Canada’s economy allocates resources.
What is scarcity in economics?
The idea that land (materials), labour, and capital (money) limit the supply of what people want and need.
Scarcity affects the availability of goods like fresh berries and the demand for products like Super Cyborg City.
What are the basic questions of economics regarding scarcity?
- What is needed or wanted?
- How will it be produced?
- Who will get it?
These questions guide economic decision-making and resource allocation.
Give an example of a resource that is usually unlimited.
Air
Air is typically freely available unless in specific situations like scuba diving.
What factors can limit the supply of fresh berries?
- Growing season in Canada
- Trade agreements with other parts of the world
These factors can affect the availability of fresh produce.
What is a critical thinking challenge regarding government involvement?
How might Canada’s government get involved in situations where people’s wants and needs are not being met?
This question encourages consideration of governmental roles in economic issues.
True or False: All things people need are limited.
False
Some needs, like air, are unlimited, while most goods and services are limited.
How does economic decision making allocate resources?
By determining what is needed or wanted, how it will be produced, and who will get it.
These decisions affect the overall quality of life.
What are the three basic factors of production?
Land, labour, and capital
What does land consist of in the context of production?
All materials found in the natural environment needed to produce goods and services, including renewable and non-renewable resources
Give examples of renewable resources.
- Trees
- Raspberries
Give examples of non-renewable resources.
- Oil
- Gold
What does labour refer to in the production process?
The physical and mental effort needed to produce goods and services
What impact can choices concerning jobs have on the workforce?
They can affect the availability of qualified workers and the production of goods
What is capital in the context of production?
The money that people own or borrow, used to purchase equipment, tools, and other resources
What is required to set up an airplane manufacturing plant?
Billions of dollars in specialized equipment and specialized workers
Fill in the blank: Land consists of all the materials found in the natural environment needed to produce goods and services, such as _______ and _______.
[renewable resources], [non-renewable resources]
True or False: Labour only refers to physical effort in production.
False
What could be a consequence if capital invested in an airplane plant were used elsewhere?
It might impact airports and air services
What is meant by ‘privately owned’ in economics?
The part of the economy owned and controlled by businesses and individuals.
This contrasts with publicly owned resources, which are managed by the government.
What does ‘publicly owned’ refer to in economics?
The part of the economy owned and controlled by government and paid for by taxes.
Public ownership is a key characteristic of planned economies.
What is a Planned Economy?
An economic system where the government makes all decisions about how to solve scarcity and owns the resources needed for production.
In a planned economy, the government plans what will be produced.
List three characteristics of a Planned Economy.
- Resources are publicly owned.
- Government makes decisions on how to use resources.
- Individual consumers have little influence on economic decision making.
What is an economic system?
A way to solve the basic problem of scarcity.
Different ideas about how to organize an economy lead to various economic systems.
What does the economic continuum represent?
The spectrum of different economic systems based on government involvement.
It shows the dynamic positions of economies like Canada and the U.S.
What is a Mixed Economy?
An economic system that combines private ownership and government control.
In mixed economies, the level of government involvement fluctuates with political changes.
List three characteristics of a Mixed Economy.
- Some resources are publicly owned and some are privately owned.
- Individuals and government both make decisions about what to produce.
- Individual consumers and government influence economic decision making.
What defines a Market Economy?
An economic system where the choices of individuals solve scarcity and private businesses own and manage resources.
In a market economy, the government does not get involved.
List three characteristics of a Market Economy.
- Resources are privately owned.
- Individuals make decisions on how to use resources.
- Individual consumers drive economic decision making by choosing what to buy.
True or False: In a Planned Economy, individual consumers have significant influence on economic decision making.
False.
Individual consumers have little influence in a planned economy.
Fill in the blank: In a _____ Economy, the choices of individuals solve scarcity.
Market
What does a shift left on the economic continuum signify?
A shift towards more government involvement in the economy
A shift left is usually described as taking a more liberal position.
What does a shift right on the economic continuum signify?
A shift towards less government involvement in the economy
A shift right is usually described as taking a more conservative position.
Who was the Prime Minister of Canada that supported more government involvement in the economy?
Lester Pearson
He was a leader of the Liberal Party of Canada.
Who was the Prime Minister of Canada that supported less government involvement in the economy?
Brian Mulroney
He was a leader of the Progressive Conservative Party of Canada.
What is the founding principle of Canada?
“peace, order and good government.”
This reflects the idea of cooperation between Francophones and Anglophones.
What type of economy does Canada have?
Mixed economy
This is due to the role government plays alongside individual ownership of private property.
What major legislation resulted from Lester Pearson’s shift left in the economy?
Publicly funded health care and pensions for senior citizens
This was part of the cooperation with the New Democratic Party.
What major steps did Brian Mulroney take to shift right in the economy?
Cuts to government spending and privatizing Crown corporations
He also negotiated the North American Free Trade Agreement (NAFTA).
Fill in the blank: Canada’s position on the economic continuum is _______.
not static
It shifts left and right depending on the political party in power.
What was the role of the government in Canada’s economy according to the founding principle?
Making decisions on behalf of everyone
This reflects the cooperative nature of Canada’s founding agreements.
True or False: The economic position of Canada is permanently fixed.
False
Canada’s economic position shifts depending on the governing political party.
What is a Crown corporation?
A company owned by Canada’s government to provide products and services to Canadians.
List three reasons for the creation of Crown corporations in Canada.
- To provide essential services
- To promote economic development
- To support Canadian culture and identity
What was Air Canada originally known as?
Trans-Canada Airlines
When was Air Canada established?
1936
Who owned and managed Air Canada when it was first established?
The federal government
In what year did Parliament decide to privatize Air Canada?
1988
What is the significance of Crown corporations in Canada’s economy?
They contribute to Canada’s mixed economy.
Which country has fewer publicly owned corporations, Canada or the United States?
The United States
What is Petro-Canada’s establishment year?
1975
What was the purpose of establishing Petro-Canada?
To compete with foreign-owned companies in developing Canada’s oil and gas resources.
Who owns Petro-Canada today?
Private investors
What does CBC/Radio-Canada represent?
Canada’s public broadcaster with English and French-language networks.
What was the goal of creating CBC/Radio-Canada?
To promote bilingualism in Canada and support Canadian culture.
True or False: CBC/Radio-Canada was created to promote American culture in Canada.
False
Fill in the blank: The connection between CBC/Radio-Canada and collective rights in Canada is related to _______.
[Canadian identity and culture promotion]
What are the two language networks associated with CBC/Radio-Canada?
- English-language network
- French-language network
Who was a member of the Democratic Party and supported government involvement in the economy?
Franklin Roosevelt
Roosevelt’s policies aimed to combat the effects of the Great Depression.
Who was a member of the Republican Party and supported less government involvement in the economy?
Ronald Reagan
Reagan’s policies focused on reducing government intervention.
What is the founding principle of the U.S. that reflects the idea of individualism?
“life, liberty and the pursuit of happiness”
This principle connects to the historical context of U.S. independence.
How does the idea of individualism influence the U.S. economic system?
It values individual economic decision making with little government involvement
This reflects the preference for a market economy.
What type of economy is the U.S. often described as having?
Market economy
This emphasizes the role of individuals over the government in economic decisions.
What does the position of the U.S. on the economic continuum depend on?
The political party that forms the government
This indicates shifts between left and right economic policies.
What example from 1933-1944 illustrates a shift left in U.S. economic policy?
Franklin Roosevelt’s New Deal
The New Deal included pensions for seniors and support for farmers.
What were two key components of Roosevelt’s New Deal?
- Pensions for senior citizens
- Funds to support farmers
These initiatives aimed to address the economic crisis of the Great Depression.
What example from 1980-1988 illustrates a shift right in U.S. economic policy?
Ronald Reagan’s presidency
Reagan’s policies aimed to reduce government involvement in the economy.
What steps did Ronald Reagan take to reduce government involvement in the economy?
- Reduced government spending
- Reduced government regulation of corporations
These steps included easing environmental standards.
True or False: The U.S. economy has remained static without shifts in policy depending on the political party.
False
The U.S. economy has shifted between left and right depending on the governing party.
Fill in the blank: Franklin Roosevelt became president of the United States in _____ during the Great Depression.
1934
Roosevelt’s leadership was crucial during this economic crisis.
What major global event influenced Franklin Roosevelt’s New Deal?
The Great Depression
This event resulted in widespread unemployment and economic hardship.
What are the two economic systems discussed?
Mixed and market economies
These systems are related but have distinct characteristics.
What drives economic decision making in pure market economies?
Consumer choices
In pure market economies, consumer preferences dictate all economic decisions.
In mixed economies, what role do consumer choices play?
They drive a lot of economic decision making
Mixed economies incorporate both market-driven and government-influenced decisions.
What are the key principles of market economics?
Supply and demand, Competition
These principles are fundamental to understanding how market economies function.
What should one consider when evaluating market economics?
Advantages and disadvantages
Consider the impact on different income levels and needs.
What is Pemex?
Mexico’s government-owned oil company
Pemex was established in 1938 when Mexico nationalized its oil resources.
Why might the status of Pemex indicate Mexico’s position on the economic continuum?
It reflects the balance between government control and market principles
The state of Pemex can illustrate the extent of state involvement in the economy.
How has Shanghai, China transformed in the last twenty years?
It shifted from a planned economy to promoting market principles
This change indicates a move towards more market-oriented economic policies.
What is a critical question regarding countries changing economic systems?
Why might countries change economic systems?
Understanding the motivations behind such changes can reveal economic strategies.
Fill in the blank: In both mixed and market economies, individual choices of _______ are an important economic force.
consumers
Consumer choices aggregate to influence overall economic decisions.
Who are consumers?
Those who use products and services.
What is demand?
The wants and needs of consumers for products and services.
Who are producers?
Those who create products and services.
What is supply?
The products and services created by producers.
What does the supply and demand diagram illustrate?
The basic principles of supply and demand.
How do supply and demand connect?
Through a cause-and-effect relationship related to price.
What are the effects of supply and demand on quality of life?
They affect the prices of products, availability of products, and jobs connected to creating products.
What is supply about?
Producing things people want; it involves producers.
What is demand about?
What people want; it involves consumers.
What happens in a state of equilibrium?
The supply of a product meets the demand for a product at a particular price.
What does it mean when demand for a product goes up?
More and more consumers are buying the product.
Fill in the blank: As consumers buy up the product, the _______ availability of the product drops.
supply
What happens to the price of a product when demand increases?
It drives up the price.
True or False: When demand goes up, consumers compete for the limited supply available.
True
What happens to demand when the price of a product goes up?
Fewer consumers can afford to buy it.
This indicates an inverse relationship between price and demand.
What happens to supply when the supply of a product goes up?
More of the product is available.
Increased supply typically results from producers being able to produce more efficiently.
What happens to price when supply goes up?
Price tends to decrease.
This is because more products are available than consumers want to buy.
What happens to demand when supply exceeds consumer demand?
Demand decreases.
Producers may cut prices to encourage buying.
What do producers generally want to achieve concerning supply and price?
Producers want to supply as much of a product as consumers will buy at a profit-maximizing price.
This creates stability in supply, demand, and price over time.
What happens to demand when the price of a product decreases?
Demand for the product goes up.
Lower prices encourage more consumers to purchase the product.
What might happen if the supply of a product decreases?
Price goes up and demand may decrease.
This creates tension in the market, affecting equilibrium.
What role might marketing play in demand?
Marketing can increase consumer interest and perceived value, leading to higher demand.
Effective marketing strategies can shift consumer preferences and boost sales.
Fill in the blank: When the price of a product goes up, _______ decreases.
demand
Fill in the blank: When there are more products available than consumers want to buy, producers may _______ prices.
cut
What is competition in economics?
Rivalry among producers to sell products to consumers
How do producers attract consumers?
Through different prices and product quality
What factors can affect competition in an economic system?
Values of consumers and government decisions about supply and demand
Fill in the blank: Competition is about producers striving to get consumers to buy their _______.
products
What is the main focus of competition between producers?
Attracting consumers to buy their products
What type of doughnuts does the first shop specialize in?
Cheap, plentiful doughnuts
How many kinds of doughnuts does the first shop make?
Five kinds
What type of ingredients does the first doughnut shop use?
Bargain ingredients
What distinguishes the second doughnut shop?
It specializes in hand-made doughnuts
How many kinds of doughnuts does the second shop offer?
Thirteen kinds
What type of ingredients does the second doughnut shop use?
High-quality ingredients
What impact does competition have on the variety and price of doughnuts available?
It affects the decisions shops make about resources like ingredients and labour
How might competition influence your quality of life?
By affecting the variety and price of products available to consumers
True or False: Competition can lead to a wider variety of products for consumers.
True
What can be a consequence of competition for consumers?
Better quality and more options
What is an example of competition in a mall?
Different kinds of stores compete for your business
Stores are owned by individuals or companies seeking to make profits
How do stores in a mall try to influence consumer behavior?
By influencing ideas about what you need and want
Stores use marketing strategies to appeal to customers
What is the opposite of competition in an economic system?
Monopoly
A monopoly occurs when one producer controls all supply of a product or service
What is a monopoly?
A situation where one producer controls all supply of a product or service
Governments sometimes create monopolies to provide essential services
What is the Canadian Wheat Board?
A government agency that markets wheat in western Canada
It is considered a monopoly because it sets the price of wheat
What is the purpose of the Canadian Wheat Board?
To protect wheat growers from low market prices
It markets wheat on behalf of all wheat growers
What is one argument for the Canadian Wheat Board?
It protects wheat growers from low market prices
Some Canadians support its role in the market
What is one argument against the Canadian Wheat Board?
It limits competition among wheat growers
Some Canadians oppose its monopoly-like structure
How did Microsoft Corporation have to adjust its software product Windows?
To allow compatibility with browsers other than Internet Explorer
This adjustment was a result of government intervention to restore competition
How can government decisions affect competition in an economy?
By intervening to prevent monopolies and restore competition
Government actions reflect societal values regarding fair competition
Fill in the blank: A _______ occurs when one producer controls all supply of a product or service.
monopoly
True or False: The Canadian Wheat Board sets the price of wheat based on competition.
False
The price is set by the Wheat Board, not by competition
Why do many countries require products like foods and cosmetics to carry labels listing ingredients?
To ensure public health and safety through informed consumer choices.
These laws often result from lobbying by concerned groups.
How might information about ingredients influence supply and demand?
It can affect consumer choices, leading to increased demand for healthier or safer products.
This may also lead to changes in production practices among suppliers.
What is the role of government laws in ensuring competition among producers?
To prevent price fixing and promote fair competition, keeping prices down for consumers.
Producers must compete to attract consumers, which helps maintain reasonable pricing.
Why do governments intervene in market economics?
To inform, protect, or ensure good practices for consumers.
Intervention occurs when consumers are not treated fairly.
What example shows government intervention in auto insurance?
The B.C. government started its own auto insurance program due to high costs from private insurers.
This action was taken to provide a more affordable option for consumers.
What is the purpose of the ‘tire tax’ imposed by many governments?
To fund recycling programs for tires, preventing them from ending up in landfills.
Recycled tires can be transformed into useful products like mats and roofing.
Fill in the blank: Governments may intervene in market economics when they feel consumers are not being _______.
fairly treated.
True or False: Governments only intervene in market economics to regulate prices.
False.
They also intervene for consumer protection and to promote fair practices.
What are some outcomes of encouraging recycling through government policies?
Reduces landfill waste and promotes sustainable practices.
Recycling decisions can significantly impact quality of life and environmental health.
List two reasons why governments might want to encourage recycling.
- Environmental protection
- Resource conservation
What is the primary role of Telefilm Canada?
To promote the development and promotion of the Canadian audiovisual industry
Telefilm Canada also provides funds and support to Canadian film and television companies and new media.
How does Canada’s government support the film industry compared to the United States?
Canada has government-supported organizations assisting the film industry, while the U.S. government does not directly support film companies.
What does Telefilm Canada aim to foster in its productions?
The production of films, television programs, and cultural products that reflect Canadian society’s linguistic duality and cultural diversity.
What is the significance of Francophone identity in Jean Patenaude’s work?
He reflects his Francophone identity in every production, emphasizing the importance of government investment in cultural identity.
What is the meaning of the word ‘karibuni’ in Swahili?
‘Welcome’
What is the focus of the film ‘Karibuni’ made by Jean Patenaude?
It is a documentary about immigrants from French-speaking Africa and their language choices when settling in western Canada.
What challenges do Francophones in western Canada face according to ‘Karibuni’?
The daily struggle to maintain their language and identity.
Why might Canadians have different views on sports funding?
Different perspectives may arise from cultural values, priorities, and the perceived importance of sports in society.
What type of grants does Canada’s government provide outside of film?
Grants to athletes training for competitions such as the Olympics.
Who is Jean Patenaude?
A Francophone filmmaker from Edmonton.
What year was the film ‘Karibuni’ released?
2007
What is the unemployment rate?
The percentage of the workforce that does not have jobs.
Which ocean borders Canada to the west?
Pacific Ocean.
What might motivate people in Smiths Falls, Ontario, to move west?
To look for work.
How might moving west affect quality of life in Smiths Falls?
It could decrease quality of life in Smiths Falls.
How might moving west affect quality of life in the west?
It could improve quality of life in the west.
What regions of Canada are indicated on the unemployment rate map?
Yukon, British Columbia, Northwest Territories, Alberta, Saskatchewan, Manitoba, Nunavut, Ontario, Quebec, Newfoundland and Labrador, Prince Edward Island, Nova Scotia, New Brunswick.
Why might views about the government’s role in job creation differ regionally in Canada?
Due to varying unemployment rates across regions.
Fill in the blank: The unemployment rate in Canada ranges from _____ to _____ percent.
0-15.9.
What is a critical thinking challenge related to relocating for work?
How might relocating to find work affect the identity of individuals?
How might relocating for work connect to quality of life?
It may impact personal identity and overall satisfaction with life.
What is a general strike?
A general strike is when workers in different sectors of the economy organize to stop working at the same time.
When did the Winnipeg General Strike occur?
The Winnipeg General Strike occurred in 1919.
What historical event influenced the Winnipeg General Strike?
The Russian Revolution influenced the Winnipeg General Strike.
What was the government’s response to the Winnipeg General Strike?
The government responded by sending police to make arrests.
How many strikers were injured during the police intervention?
29 strikers were injured.
What significant event occurred two years before the Winnipeg General Strike?
The Russian Revolution occurred two years before the Winnipeg General Strike.
What was the fear of Canada’s government regarding workers’ unions after the Russian Revolution?
The government feared the potential power of workers’ unions.
What happened to one of the strikers during the police intervention?
One striker died.
What economic conditions contributed to the Winnipeg General Strike?
Many people had trouble finding jobs after World War I.
What does historical context refer to?
Historical context refers to events, accepted values, and attitudes that shape responses to issues.
Fill in the blank: The Winnipeg General Strike took place in _______.
[1919]
What does the Charter of Rights and Freedoms protect?
Collective bargaining
The Supreme Court of Canada ruled on this protection.
What section of the Charter guarantees freedom of association?
Section 2
This section allows workers to unite and present demands to employers.
What obligation does section 2 of the Charter create for employers?
To negotiate with workers
This obligation is part of the freedom of association.
What law did the B.C. government pass in 2002 that affected health care workers?
A law that cut jobs and wages
This law violated an agreement reached through collective bargaining.
What was the purpose of the B.C. government’s 2002 law?
To control health care costs
This was the government’s justification for the law.
What did the Supreme Court ruling do to parts of the B.C. law?
Struck down parts of the law
The ruling stated that governments cannot substantially interfere with collective bargaining.
What does the ruling imply about government actions regarding strikes?
Governments cannot end strikes with back-to-work legislation
This follows an instance where the Canadian government legislated striking CN rail workers back to work in April 2007.
True or False: The Supreme Court of Canada ruled that collective bargaining is not protected by the Charter.
False
The ruling confirms that collective bargaining is indeed protected.
Fill in the blank: The Supreme Court ruling affects workplaces across the _______.
country
This highlights the nationwide implications of the decision.
