Economics

What is Economics? Economics – the study of production, consumption, and sales of products. Economy - is how people distribute scarce resources to produce various commodities (products) and how those commodities are distributed for societal consumption

Impact of Economics  in a stable and expansive economy, people will spend more and have more jobs opportunities  in an unstable and slow economy, unemployment rates will be high and jobs will be harder to find What do you think?  Write down how economics might affect your future career.

Economic Resources Resources are anything used to make goods or services, also called factors of production They are scarce and cannot meet all human wants and needs  human necessities  include goods and services we cannot live without  human wants  include every other type of goods and services we may want but do not need  examples:  need: open heart surgery  want: liposuction

Four Factors of Production 1. Land natural resources found on earth earth or seas 2. Labor human resources includes all people who work within an economy 3. Capital monetary resources needed to start and operate a business goods used in the production process 4. Entrepreneurship involves human skills required to start and run a business organizes the other three factors to create economic goods and services Example: Chick Fil-A

Economic Utility Is the value added to a product or service by the role of marketing Includes these five types:  time utility  place utility  form utility  possession utility  information utility Utility means customer satisfaction 6

Time Utility Enhances value by having a product or service available to consumers during a certain time of day, week, month or year Examples include:  stores staying open after 5 p.m. for those who work during the day  retailers providing gift wrapping during the holiday season 7

Place Utility Enhances value by placing products or services in easily accessible locations for consumers Examples include:  banks placing ATMs outside of convenience stores, stadiums, theaters, etc.  restaurants providing delivery or curbside pickup 8

Form Utility Enhances value by creating more useful or desirable products out of raw materials or separate parts Examples include:  grocery stores selling frozen or fresh pre-prepared meals  car manufacturers installing a CD player in a car  retailers selling bundles of products which complement each other 9

Possession Utility Enhances value by allowing for easy use by consumer or transfer of ownership to consumer Examples include:  retailers providing layaway or financing for large purchases  property owners renting to those who prefer not to or cannot afford to purchase a home  Forms of payment-cash, credit, lease 10

Information Utility Enhances value by supplying consumers with information Examples include:  informed sales staff describing a product’s features and benefits  advertising informing consumers about a new product  retailers offering a lesson on how to most effectively use a product 11

 Types of Trees Used: Spruce, Fir, Aspen, Maple and Eucalyptus

 Production Process: 1. Bales of pulp are put into a hydrapulper, which resembles a giant electric mixer. The pulp is mixed with water. 2. As the stock moves to the machine, more water is added to make a thinner mixture which is more than 99 percent water. 3. A felt belt carries the sheet from the forming section to the drying section. 4. The large rolls are transferred to a rewinder, where two sheets of wadding are plied together before being further processed by calender rollers for additional softness and smoothness. 5. In the converting department, numerous rolls are put on the multifolder, where in one continuous process, the tissue is interfolded, cut and put into Kleenex® tissue cartons which are inserted into shipping containers.

 Kleenex are conveniently sold in nearly every grocery store, convenience store and gas station in the United States.  You cannot purchase Kleenex on the official website.  On the Kleenex website, you can search for hard to find items

 At any hour of the day, you would be able to go to a store (such as Wal-Mart) and purchase a box of Kleenex.

 You can find information regarding Kleenex products on the official website (

 Kleenex products are affordable and relatively easy to find.  If you register for the Newsletter online, you will receive s regarding promotions and coupons.

Basic Economic Systems Capitalism - USA Socialism – everyone works according to his/her ability. Everyone is given what he/she needs according to his/her contribution. Communism – everyone works according to his/ her ability. Everyone is given what he/she needs no matter how he/she contributed.

Capitalism An economic and political system in which a country's trade and industry are controlled by private owners, as opposed to the government, for profit.

Basic Principals of Capitalism Free Enterprise System - An economic system where few restrictions are placed on business activities and ownership. Read more: ise.asp#ixzz27mmjvPZn ise.asp#ixzz27mmjvPZn

Monopoly A company with EXCLUSIVE control over a product or a piece of the market. Examples: local cable service, local water services, electric companies used to be Monopolies are not permitted in free enterprise because they stop competition.

Risk vs. Reward Risk implies the potential for loss or failure. Reward is the benefits reaped. Companies must calculate whether or not the risk is worth the reward. What are some examples of taking risks?

Profit Money earned after an exchange. Profit = Revenue - Cost

Key Terms Supply – the AMOUNT of goods producers are willing to make and sell. Demand – the consumers WILLINGNESS and ABILITY to buy products Surplus – supply exceeds (>) demand. Shortage – demands exceeds (>) supply. Equilibrium- supply = demand

Determine Prices