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M Money
is for
An Economics Alphabet
Written by Debbie and Michael Shoulders and Illustrated by Marty Kelley
A
Economics is nothing new. Scientists
is for Abundance
believe the idea of economics—or managing
resources—is about 10,000 years old. It
If you grow a plentiful crop,
began when the first humans settled in
more than you’ll ever need,
one place to grow crops. Prior to that, for
nearly two million years, people survived Your abundance can be traded
as hunters and gatherers. These nomads
for meat, or tools, or feed.
moved often from one place to another in
search of wild plants and animals to eat.
When they accumulated an abundance of
food they were able to settle down.
Since he no longer had to spend his time
finding food, early man turned to growing
food. This led to larger farms that could
grow more crops. The ability to produce an
abundance of resources—in this case, food
—was necessary for the beginning of an
economy. Hunters and gatherers still exist
in the world today, but they are very few
in number.
When the early people no longer lived as
nomads, they found it necessary to find more
permanent shelters. Using natural resources
like clay, earth, stone, and wood, they built
B
lodgings. In addition to homes they also built
is for Build markets and temples. The more structures
that were built in one place, the more
Being a successful farmer
people wanted to stay and live in that place.
means a family need not roam. These permanent settlements helped early
economies to grow as people traded for
They can settle in one spot
the food, goods, and services they needed
and build a permanent home.
to survive.
As the number of permanent buildings
grew in one location, a civilization formed.
Civilizations are groups of people known for
their unique culture or lifestyle. One of the
earliest examples of this was Mesopotamia—
called the “cradle of civilization.” Mesopotamia
developed more than six thousand years ago.
When the people in a civilization could count
on food from farms and markets they had
extra time that allowed them to pursue other
activities, like art, music, and sports. It was
these things that made a civilization unique.
Civilizations helped to develop the idea
of “division of labor.” More people living in
one area let individuals focus on specialized
jobs such as carpentry, bricklaying, or
shopkeeping.
C
is for Civilization
When many families come together
in one common place
they create a civilization
by sharing their lives and space.
When the people in a civilization produced
D a surplus of resources, more items than any
one family could use, they began bartering
is for Demand and Supply
or trading those items. A chicken farmer
If there is not enough of something might trade for a bushel of corn or a sack of
beans—this way everyone gets the supplies
they say the supply is low.
they need.
This creates high demand for it
and its cost will likely grow. Conditions like weather, insects, or diseases
can harm a farmer’s crops or animals. This
causes their supply to decrease and means
they won’t have as much to barter or sell.
But people still need these things. If the
supply of corn is lower than normal, the
demand is high. Prices might be raised on
items that are in high demand. People are
willing to spend more for those resources.
If the weather is good, the insects few, and
the crops healthy, a surplus exists. People
can find plenty of those same beans, or eggs,
or bushels of apples in the marketplace.
When the supply is high, demand goes down.
And the cost for those items usually drops
as well.
E
is for Economics
Economics is the study of how
we get things we want and need,
how we make and swap for goods, and
why businesses fail or succeed.
What, then, is economics? In general,
people need food, shelter, and clothing.
In a successful civilization people work
together to make sure these items are
available to everyone, but sometimes
that does not happen.
Economics is the system of how people
obtain the resources they need. In an
economic system, the people work
together to ensure fairness in the ways
goods and services are produced and
distributed. Usually laws are needed to
protect suppliers and buyers. A stable
economic system forms when people
work hard for the benefits they earn,
trade is encouraged, and the laws of
trade are honored.
F
is for Free Markets
Free market means that you decide
what to make, grow, or sell.
Buyers, if they like what you have,
will help your business excel.
Free markets provide a way for an even
exchange of goods or services based on
supply and demand. It’s important in a free
market for governments to have laws that
make sure the sellers and buyers are
treated fairly.
Today people sell lots of different things
such as toys, clothing, and food. Sellers
want to receive a fair payment for items
sold to cover the cost of production. If the
buyer does not pay a fair price, the seller
makes no money. To prevent that from
happening there are laws that protect
the seller.
On the other hand, buyers want to be sure
that the items they are purchasing are worth
the purchase price. If a seller charges a high
rate for a low-quality product, the buyer
loses money. So there are laws to protect
the buyer too.
People believe that in societies where free
markets are encouraged, if a person works
hard enough they will be able to earn extra
money. Free markets offer opportunities
for citizens.
