Louisiana: The History of an American State Chapter 3: Louisiana’s Economy: Resources and Rewards Study Guide

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Slide 1 Louisiana: Louisiana: The History of an American The History of an American

StateState

Chapter 3Chapter 3Louisiana’s Economy: Louisiana’s Economy:

Resources and Resources and RewardsRewards

Study PresentationStudy Presentation©2005 Clairmont Press

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Slide 2 Chapter 3Chapter 3Louisiana’s Economy: Louisiana’s Economy:

Resources and RewardsResources and Rewards

Section 1: Section 1: Basic Economic ConceptsBasic Economic ConceptsSection 2: Section 2: Louisiana’s Economic HistoryLouisiana’s Economic HistorySection 3: Section 3: Louisiana’s ResourcesLouisiana’s ResourcesSection 4: Section 4: Providing Louisiana’s Goods and Providing Louisiana’s Goods and

ServicesServices

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Slide 3

ESSENTIAL QUESTION:–How do people satisfy their wants

and needs in our economic system?

Section 1: Basic Section 1: Basic Economic ConceptsEconomic Concepts

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Slide 4 Section 1: Section 1: Basic Economic ConceptsBasic Economic ConceptsWhat words do I need to know?1. goods2. services3. consumer4. producer5. natural resources 6. human resources7. capital resources8. scarcity

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Slide 5 Section 1: Section 1: Basic Economic ConceptsBasic Economic Concepts

9. opportunity cost10. supply11. demand12. profit13. traditional economy14. command economy15. market economy

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Slide 6 Wants and NeedsWants and NeedsWants and NeedsWants and NeedsWants and NeedsWants and NeedsWants and NeedsWants and Needs

• goods: physical items – food, clothing, cars, housing, etc.

• services: activities people do for a fee

• producer: person or business –makes goods or provides a service

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Slide 7 Resources and ScarcityResources and ScarcityResources and ScarcityResources and ScarcityResources and ScarcityResources and ScarcityResources and ScarcityResources and Scarcity

• natural resource: gift of nature – part of the natural environment, - water, trees, minerals

• human resources: people – those who produce goods & provide services

• capital resources: money & property –used to produce goods and services

• scarcity: available resources – demand greater than supply

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Slide 8 Making Choices

• Scarcity vs. producers & consumers• Unlimited needs vs. wants• Limited resources vs. limited amounts of

goods & services• Basis of an economic system

– choosing how to use resources• Those making choices in United States

– individuals, businesses, & communities

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Slide 9 Costs and Benefits

• Opportunity benefit– Choices (getting a job vs. going to college)– Immediate salary vs. getting an education

• Opportunity cost – cost of choice not taken

• Other choices of opportunity benefits & costs– Using resources or using time– Value of non-chosen alternative

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Slide 10 Trade-Offs

• Either/or choice: not always the best

• May combine parts of choices as trade-off

• Trade-off choices to get wants & needs

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Slide 11 Supply and Demand

• supply: quantity of a good or service offered for sale

• demand: quantity of a good or service consumers are willing to buy– Lower prices: consumers buy more,

producers make less $ per item– Higher prices: consumers buy less,

producers make more $ per item• profit: amount left after costs are

subtracted from price (motivator for producers)

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Slide 12 Basic Economic Questions

Four basic economic questions: 1) What to Produce2) How to Produce3) How Much to Produce4) For Whom to Produce

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Slide 13 What to Produce

• Making the necessary decisions–Meeting needs & wants–How to make the capital resource

(money)–Human resources –Natural resources

• Finally, deciding what to produce

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Slide 14 How to Produce

• Plan of action:– How to carry out plan– Process of implementation– Supplies needed

• Overall production schedules:– When to start production– When to end production

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Slide 15 How Much to Produce

• Items to consider for plan–Time involved –Resources needed–Market demand for product (s)

and/or service (s)• Decisions affected by scarcity

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Slide 16 For Whom to Produce

• Develop knowledge of consumers• Study needs of consumers• Consider supply & demand• Analyze & plan for competitors• Consider advertising

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Slide 17 Economic Systems

• economist: one who studies the economy

• Three basic kinds of economies 1. Traditional Economy2. Command Economy 3. Market Economy

• Economy may function as combination of all three

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Slide 18 Traditional Economy

• Customs, habits, & beliefs determine and answer the four basic economic questions

• Continues in the way it has always been done

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Slide 19 Command Economy

• The government …controls the economy answers the four basic questionsmakes the decisionshas power & authority negotiates input & outputcontrols competition

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Slide 20 Market Economy

• Individuals…Answer the four basic economic questions based on supply & demandAlso known as free enterpriseBased on private ownershipFreedom of choice

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Slide 21 Section 2: Louisiana’s Section 2: Louisiana’s Section 2: Louisiana’s Section 2: Louisiana’s Section 2: Louisiana’s Section 2: Louisiana’s Section 2: Louisiana’s Section 2: Louisiana’s

Economic HistoryEconomic HistoryEconomic HistoryEconomic HistoryEconomic HistoryEconomic HistoryEconomic HistoryEconomic History

ESSENTIAL QUESTION:–What were Louisiana’s early

economic systems?

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Slide 22 Section 2: Louisiana’s Section 2: Louisiana’s Section 2: Louisiana’s Section 2: Louisiana’s Section 2: Louisiana’s Section 2: Louisiana’s Section 2: Louisiana’s Section 2: Louisiana’s

Economic HistoryEconomic HistoryEconomic HistoryEconomic HistoryEconomic HistoryEconomic HistoryEconomic HistoryEconomic HistoryWhat words do I need to know?

1. barter2. mercantilism3. smuggling4. indigo5. tobacco6. commerce

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Slide 23 Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic HistoryHistoryHistoryHistoryHistoryHistoryHistoryHistory

• 1st economic system: barter (trading goods & services without money)

• Then mercantilism: command economy controlled by the government

• Next, smuggling: illegal trade with colonies of other nations

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Slide 24 Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic HistoryHistoryHistoryHistoryHistoryHistoryHistoryHistory

• Louisiana Purchase: – end of colonial period – end of earliest crops tobacco & indigo– beginning of agricultural market

• New market: sugar cane & cotton • New Orleans:

– became a major port for North America – 1801 described as “the grand mart of

business, Alexandria of America”

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Slide 25 Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic HistoryHistoryHistoryHistoryHistoryHistoryHistoryHistory

• Early years of statehood: a continuing agricultural economy

• 20 years before Civil War: a booming economy

• End of Civil War till after WWII: a struggling economy

• Growth and survival of war-developed industries

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Slide 26 Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic HistoryHistoryHistoryHistoryHistoryHistoryHistoryHistory

• New equipment & machines brought by technology

• Human labor replaced by machines• Many farms deserted by workers• 1880 – 1920: most old growth trees

cut or gone

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Slide 27 Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic Louisiana’s Economic HistoryHistoryHistoryHistoryHistoryHistoryHistoryHistory

• Oil (another resource)– Became valuable in early 20th century– Economy base changed by new industry– Agricultural economy changed due to

WWII & demands for oil– New economic direction:

interdependent global economy– 21st century: seeks diversity & less

dependence on oil industryClick here to return to Main Menu.

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Slide 28 Section 3: Louisiana’s Section 3: Louisiana’s Section 3: Louisiana’s Section 3: Louisiana’s Section 3: Louisiana’s Section 3: Louisiana’s Section 3: Louisiana’s Section 3: Louisiana’s ResourcesResourcesResourcesResourcesResourcesResourcesResourcesResources

ESSENTIAL QUESTION:–What roles do natural resources,

capital resources, and human resources play in the economy of Louisiana?

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Slide 29 Section 3: Louisiana’s Section 3: Louisiana’s Section 3: Louisiana’s Section 3: Louisiana’s Section 3: Louisiana’s Section 3: Louisiana’s Section 3: Louisiana’s Section 3: Louisiana’s ResourcesResourcesResourcesResourcesResourcesResourcesResourcesResources

What words do I need to know?1. mineral resources2. nonrenewable3. lignite4. biological resources5. renewable6. pulpwood7. labor union

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Slide 30 Natural ResourcesNatural ResourcesNatural ResourcesNatural ResourcesNatural ResourcesNatural ResourcesNatural ResourcesNatural Resources

• Economy supported by abundant natural resources

• Examples: air, water, & rich soil• 21st century: agricultural shift from

small farms/plantations to huge agribusiness systems

• Fewer people on farms• Amount of crops not decreased

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Slide 31 Natural ResourcesNatural ResourcesNatural ResourcesNatural ResourcesNatural ResourcesNatural ResourcesNatural ResourcesNatural Resources

• State ranking: 2nd in sugar cane & sweet potatoes

• Vital crops: rice, cotton, soybeans • Soil & climate good for raising beef &

dairy cattle (dairy farming diminished)• Abundant water supply good for

agriculture, industry, human use, transportation, & recreation

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Slide 32 Mineral Resources

• Oil• Natural Gas• Salt• Sulfur• Lignite

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Slide 33 Mineral Resources

• minerals: inorganic substances formed by Earth’s geological processes

• Important to Louisiana’s economy• nonrenewable: not replaced by nature

once extracted (taken) from the environment

• Mineral resources found in Louisianaoil (“black gold”), natural gas, salt, sulfur, lignite

• Construction resources in Louisianasand, gravel, limestone

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Slide 34 OilOilOilOil

• Oil for today’s energy created by decayed plants from millions of years ago

• 10% of US oil reserves in Louisiana• Louisiana: one of top oil-producing states

in United States• 1901 – 1st oil well in Louisiana• 1947 – 1st platform in Gulf of Mexico• More oil deposits beneath Gulf of Mexico

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Slide 35 Natural Gas

• Larger deposits than oil• ¼ of the nation’s supply• 1st burned as waste• 1917: “carbon black” developed

–used in making tires, ink, & more• Important energy for homes &

industry

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Slide 36 SaltSaltSaltSalt

• Needed for human & animal survival• Used by Native Americans in trade• A form of money, later• Relied on by the Confederacy during

the Civil War• Used in chemicals & other products

–polyvinyl chloride plastic –PVC pipe for plumbing

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Slide 37 SulfurSulfurSulfurSulfur

• Major ingredient in:• matches, gunpowder, medicine,

plastic & paper• 1869 – “richest 50 acres in the world”

• town of Sulphur in Calcasieu Parish• Decrease in value

• foreign import changed importance• unprofitable to mine in Louisiana

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Slide 38 LigniteLigniteLigniteLignite

• Soft, brownish-black coal• Burns poorly• Mined since 1970s• Found mostly in DeSoto Parish• Used for electric power station

near Mansfield

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Slide 39 Biological ResourcesBiological ResourcesBiological ResourcesBiological ResourcesBiological ResourcesBiological ResourcesBiological ResourcesBiological Resources

• Biological resources– Common term: plants & animals– Scientific term: flora & fauna

• renewable: replenish over time• Main divisions:

– Forests– Wildlife – Fish

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Slide 40 Forests

• 50% of Louisiana in forests• 2nd largest income producer• 90% pine trees• 75% trees cut for pulpwood• Large trees cut for sawtimber

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Slide 41 Forests

• Hardwood sawtimber used for furniture & flooring

• Paper mills, lumber mills, & plywood plants

• Christmas tree farms started by the Office of Forestry in the LA Dept. of Agriculture

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Slide 42 Wildlife

• Variety of wildlife–History of trapping & hunting tradition

• Economic resourcesFur pelts: –Once sold more than a million pelts

annually• Hunting regulations

–State Department of Wildlife and Fisheries

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Slide 43 Wildlife

• Hunting• Source of food• Recreation• Millions of dollars for state’s economy

• Timber cutting• Reduced forest land• Forest animals decreased• Increase in recent years

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Slide 44 Wildlife

• White-tailed dear –Population has increased

• Black bear–Largest wild animal in Louisiana–Endangered: not legal to hunt

• Wild turkey–Classified as a game bird–Efforts have been made to increase

its numbers

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Slide 45 Wildlife

• Dove• Quail• Migratory waterfowl• Alligators

−1963: placed on the federal protected species list

−1981: hunting under strict rules−Millions of dollars in hides & meat

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Slide 46 Fish (Recreation)

• Freshwater bream, bass, perch, catfish

• Game fish: –trout, redfish, drum, mackerel, blue

marlin, amberjack, grouper, & tarpon (illegal to sell commercially)

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Slide 47 Fish (Commercial)

• Crawfish raised on crawfish farms• Catfish sold: freshwater & farms• Commercial fishing: tuna, sea

trout, red snapper

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Slide 48 Capital ResourcesCapital ResourcesCapital ResourcesCapital ResourcesCapital ResourcesCapital ResourcesCapital ResourcesCapital Resources

• Human-made products used to produce goods or services

• Examples: rice mills, sugar refineries, oil refineries, cotton gins, & meat-packing plants

• Others include: transportation facilities – bridges, highways, & airports

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Slide 49 Human ResourcesHuman ResourcesHuman ResourcesHuman Resources

• People who supply the labor– Physical or mental– Paid for goods or services

• Requirements– new skills & specialization – education & training

• Labor unions – workers’ organization to protect workers’ rights

• 1976 – right-to-work law passed – workers could not be forced to join a union

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Slide 50 Section 4: Providing Section 4: Providing Louisiana’s Goods and Louisiana’s Goods and

Services Services

ESSENTIAL QUESTION: –What is Louisiana’s place in the

global economy?

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Slide 51 Section 4: Section 4: Providing Louisiana’s Providing Louisiana’s Goods and ServicesGoods and Services

What words do I need to know?1. private goods & services2. public goods & services3. interdependent 4. Superport5. tariff6. economic indicators7. gross domestic product (GNP)8. consumer price index9. inflation

10. unemployment rate

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Slide 52 Louisiana’s Goods and Louisiana’s Goods and Louisiana’s Goods and Louisiana’s Goods and Louisiana’s Goods and Louisiana’s Goods and Louisiana’s Goods and Louisiana’s Goods and ServicesServicesServicesServicesServicesServicesServicesServices

• free market: private goods & services• Limited services & benefits to the

owners• Provided by the government: public

goods & services• Usually available to everyone

– highways, police, education, libraries

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Slide 53

Louisiana-made goods include…• Ships, trucks, electrical equipment, glass

products, automobile batteries, & mobile homes

• Chemicals industry– Ranks 2nd in USA– Petrochemicals (chemicals made from

petroleum) – More than 100 chemical plants in LA– Fertilizers & plastics

ManufacturingManufacturingManufacturingManufacturingManufacturingManufacturingManufacturingManufacturing

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Slide 54 ManufacturingManufacturingManufacturingManufacturingManufacturingManufacturingManufacturingManufacturing

• Billions of gallons of gas from petroleum refineries each year

• Shipbuilding –transport ships & merchant

vessels–Coast Guard cutters, barges,

tugs, supply boats, fishing vessels, & pleasure craft

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Slide 55 Aerospace and AviationAerospace and AviationAerospace and AviationAerospace and AviationAerospace and AviationAerospace and AviationAerospace and AviationAerospace and Aviation

• Louisiana workers part of the United States space program

• Space shuttles assembled in New Orleans

• Lake Charles aircraft assembly for military use

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Slide 56 BiotechnologyBiotechnologyBiotechnologyBiotechnologyBiotechnologyBiotechnologyBiotechnologyBiotechnology

• Combines biological research with engineering

• Pennington Biomedical Center leader in research

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Slide 57 Service IndustriesService IndustriesService IndustriesService IndustriesService IndustriesService IndustriesService IndustriesService Industries

• Adds billions of $ to the economy• Tourism

– sightseeing– eating– shopping– fishing & hunting– Mardi Gras

• Movie-making– 1908 – 1st film made in Louisiana– 1917 – 1st Tarzan film made– More recent – “Steel Magnolias”

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Slide 58 Economic InstitutionsEconomic InstitutionsEconomic InstitutionsEconomic InstitutionsEconomic InstitutionsEconomic InstitutionsEconomic InstitutionsEconomic Institutions

• Joint effort to produce & sell goods and services

• Groups known as economic institutions• Include

– Businesses large and small– Corporations: owned by investors, banks, &

labor unions• Banks important: allow producers &

consumers to trade, save, & invest

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Slide 59 Louisiana in the U.S. Louisiana in the U.S. Louisiana in the U.S. Louisiana in the U.S. Louisiana in the U.S. Louisiana in the U.S. Louisiana in the U.S. Louisiana in the U.S. and Global Economiesand Global Economiesand Global Economiesand Global Economiesand Global Economiesand Global Economiesand Global Economiesand Global Economies

• 1st economic systems: simple barter economies

• Today’s systems interdependent– overlap– producers & consumers rely on each

other• Louisiana’s offshore port: Superport

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Slide 60 Trade PoliciesTrade PoliciesTrade PoliciesTrade Policies

• North American Free Trade Agreement (NAFTA) changes trade policies & agreements

• Trade restrictions removed• Foreign countries offer cheap labor abroad• Companies moving abroad• Tariffs lessened• Imported goods & low prices hurting

Louisiana

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Slide 61 Measuring the EconomyMeasuring the Economy

• Economic indicators• Gross domestic product• Consumer price index• Inflation• Unemployment rates

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