Intro to Business Unit 1 Chapter 1
Need things that are a must to survive Ex: Water Want things that make life more comfortable or enjoyable Ex: Chocolate
Chapter 1 Good items that you can physically see and touch Services are activities that are consumed at the same time they are produced
Chapter 1 Economic Resources are the means through which goods and services are produced Natural Human Capital
Natural Resources Raw materials that are supplied by nature
Human Resources People who are producing goods and services.
Capital Resources The products and money used in the production of goods and services.
Scarcity-Basic Economic Problem Means not having enough resources to satisfy every need Tradeoff What you will give up to having something else. Opportunity Cost Is the value of the next best alternative
The Decision Making Process Define the problem Identify the choices Evaluate the advantages and disadvantages Choose one Act on your choices Review your decision
Economic Systems Basic Economic Questions What goods and services will be produced? How will the goods and services be produced? What needs and wants will be satisfied with the goods and services produced?
ECONOMIC SYSTEMS A nation’s plan for answering the key economic questions
Economic Systems Traditional-same as always Ex. Amish, Tribes Command-government has answers to questions Ex. Cuba, North Korea
Economic Systems Market-individuals answer the questions Ex. EBay, auction Mixed-combination of market and command Ex. U.S. most countries
U.S. Economic System Components Private Property Freedom of Choice Profit Competition Private Enterprise
Law of Demand Consumers set demand Ex: Tickets to a game or concert
Law of Supply Producers establish supply levels.
Chapter One Review Terms Wants, needs, goods, services, scarcity Economic Resources Decision Making Process Economic Questions Economic Systems U.S. Economic System Components Supply/Demand Curves