What is Economics? Economics studies the Production, Consumption, and Distribution of _____________ goods and services for a society with __________ wants and _________. scarce unlimited needs

What is Economics? Basic questions answered by an economic system –Production (what is produced) ________________ (things used to make goods and provide services)- Tools, Natural Resources, Human Resources) ___________ (What are the needs or wants) –Consumption (how much is produced/consumed) ______________ _____________ Resources Demand Resources Demand

What is Economics? Basic questions answered by an economic system –How are goods produced? Capital- ____________ to get started and ______________ needed to make product ______ and _________ Resources- materials to make good and energy to support production ____________- Workers _____________- People who plan and supervise the production money equipment LandNatural Labor Management

What is Economics? Basic questions answered by an economic system –Distribution (for whom are the goods produced) Marketing –Getting the product to the ______________ –Advertising –Selling –______________ consumer Storage

Scarcity Limited supply of resources –Requires trade-offs or ____________ What you don’t choose, in favor of something else choice

Opportunity Costs/Incentives Limited supply of resources –____________ costs The ________ value of the good or activity you ________ in favor of something else –Incentives ___________ the selection/trade-off Opportunity highest Gave up Influence

Economic systems Traditional Economy –Answers to most economic questions are based on tradition/customs –Things will be done the way they have always been done –Today, there are a few traditional economies. Mostly located in isolated areas within tribes or other very small societies.

Economic systems Free Market (buying/selling) Economy –Individual _______________ People have the freedom to _________ the product they want –________ sovereignty the individual consumer make economic _________________ (buy/sell/produce) –________ (amount of money a company has after paying all their expenses) people to start businesses to make ________ Choice choose Consumer decisions Profit profit

Economic systems Free Market Economy (cont) –_______________ Businesses are free to _________________ with others Competition will lead to lower prices and/or better quality products –________ ownership of property/resources Individuals _________ the means of production Competition compete Private own

Economic systems Command Economy –Centrally planned economy Government makes ____ economic decisions Decides what, how many, how, and who gets it –Central ownership of property/resources __________________ provides necessary raw materials, money, and labor –Lack of consumer choice The ___________________has little influence in economic decisions all Government individual

Economic systems Command Economy –Pros Government can set the _________ of goods Consumers are assured ___________ when they are available –Cons No _______________ No ____________ Goods may be ___________ made Individuals have little economic ___________. They must _______ where the government tells them. prices goods competition choice poorly freedom work

Economic systems Mixed Market Economy –Most ___________ economic system in the world. U.S. and China –____________ and ____________ act as decision makers in the private sector –______________ acts as the decision maker in the public sector Areas such as roads, mail, water, police, military common Individuals Businesses Government

Economic systems Mixed Market Economy (cont.) –___________ government role than in the Free Market Economy. Less government than the command. Government monitors to prevent businesses from cheating or abusing workers and consumers, making sure products are safe, protecting the environment –______________ –__________ and ____________ Greater Incentives Supply Demand