ECONOMICS Economics is the study of the making, buying, and selling of goods or services.

These days people use money to get what they need and want. Before there was money, people had to barter to get what they wanted and needed. To barter means “to trade”.

One person might have traded five rabbits for milk and eggs. Some people were good hunters, some were craftsmen, and some were farmers. One person might have traded five rabbits for milk and eggs.

Want to trade with me?

The cost of a need or want is the amount paid for that item. The cost of an item can be paid with an exchange of service, goods, or money

A need is something you cannot live without. A want is something you desire, but isn’t necessary to keep you alive.

Turn to a partner and tell them one thing you need and one thing you want.

Eventually, people wanted something smaller to carry around as money. People started using coins, as well as paper money to pay for goods and services.

What is the difference between a and a GOOD SERVICE?

GOOD SERVICE A is a product that can be bought or sold. A is work that someone does for someone else. SERVICE

GOOD SERVICE GOOD SERVICE 1) 2) 3) 4) GOOD Look at the pictures on the right. Which of these pictures show goods and which ones show services? SERVICE GOOD SERVICE

Some services are paid for by taxes. Tax is the money our government collects from citizens to pay for services like post offices and schools.

When we buy a good or a service we are consumers. A consumer is anyone who buys a good or a service.

Consumers buy from producers. A producer is anyone who makes or grows a good or performs a service.

Producer Consumer Look at the pictures on the right. Which of these pictures show consumers and which ones show producers? 1) Producer 2) Consumer

To be a consumer you need People work jobs to earn money or income.

The more income you make, the more goods and services you can buy.

Paying the dentist to clean your teeth. Buying items at a craft fair. When goods and services are exchanged for money or other goods and services a market occurs. Examples: Paying the dentist to clean your teeth. Buying items at a craft fair. Cutting someone’s hair in exchange for them fixing your car.

Haircut Large pizza How many different MARKETS can you create from these four goods and services? New shirt Mow the lawn

6 A haircut for a pizza A haircut for a shirt A haircut for mowing the lawn A pizza for a shirt A pizza for mowing the lawn A shirt for mowing the lawn

As a consumer, I want to buy a new car from Lubbers, the producer, but my income isn’t enough. I will go to the bank and borrow some money. The bank will lend me the money if I agree to pay them back a little more (interest) than I borrow.

Some people spend their money Some people spend their money. Spending means the use of money to buy goods and services. Other people choose to save their money. Saving means to set aside money for future use.

Let’s check your knowledge! ECONOMIC

A good is a product that can be bought or sold. What is a good? A good is a product that can be bought or sold.

Anyone who makes a good, or performs a service. What is a producer? Anyone who makes a good, or performs a service.

Money the government collects to pay for services. What is tax? Money the government collects to pay for services.

What is the difference between a need and a want? A need is something you cannot live without. A want is something you desire, but don’t need.

Anyone who buys a good or a service. What is a consumer? Anyone who buys a good or a service.

Work someone does for someone else. What is a service? Work someone does for someone else.

The study of the making, buying, and selling of goods and services. What is Economics? The study of the making, buying, and selling of goods and services.

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