Basic Economic Questions What every economy, business and consumer must answer!

How do businesses make money? Businesses make money by selling goods and services What are Goods and Services?

Goods Goods are physical objects such as: –Computers –Sneakers –Cars

Services Services are actions that a person performs for another person. –Teaching –Cleaning –Fixing my car

Economic Questions All economies, businesses and people must answer the following questions: 1.What goods and services will be produced? 2.How will the goods and services be produced? 3.Who are the goods and services for? 4.How much will be produced now and how much later?

What are resources? Resources are the materials from which goods and services are made. There are 3 types of resources.

1. Human Resources A person’s knowledge, skills, attitudes and abilities determine that individual’s value as a human resource. The more rare the skill, knowledge etc. the more valuable and higher pay. Ex. Unskilled workers- low pay Teachers- high level of education, higher pay Doctors- a lot of education and rare skills, well paid NFL quarterbacks- rare physical abilities, very well paid

2. Natural Resources Raw materials from which goods and services are made. Land Timber Oil

3. Capital Resources Money and property used to produce goods and services Tools Buildings Machines

My Pizzeria Imagine we start a pizza business. What are the –Human Resources –Natural Resources –Capital Resources

Human Resources A Manager Pizza maker (cook) Cashier Dishwasher Delivery person Who will get paid the most? Why?

Natural Resources Flour Cheese Vegetables Meat and other toppings Tomato Sauce Gas for pizza oven Water Electricity Paper Plates Paper Napkins –Note: these items are used once, then disposed of.

Capital Resources Building/Storefront for the restaurant Pizza Oven Cash register Counter Refrigerator/Freezer Re-usable plates Re-usable napkins (cloth) Car for deliveries

Create a Business What goods or services will you provide? What is the name of your business? Where will you locate your business? Why did you choose this location? List the human, natural and capital resources you’ll need.