Economics Chapter 1

Needs & Wants Needs-items required to live. Name some Wants-items to add comfort & pleasure Change daily Economic status of your country determines needs and wants. Why is this true?

Satisfying Want & Needs Goods-items you can see and touch. Services-activities consumed as they are produced. They satisfy your wants and needs. HOW?

Economic Resources Means through which goods and services are produced. 3 kinds-natural, human and capital Define each. Go to page 11 lets answer 1-1 questions.

Economics Individuals and businesses have unlimited wants and needs. What does that mean for businesses? Scarcity-no enough resources to satisfy every need. Economic Decision Making-process of choosing which wants, among several options will be satisfied.

Economics Trade-off-giving up something for something else. Opportunity Cost-value of what you gave up.

Decision Making Process Define Problem-after school activity or holding a part-time job. Identify Choices-name alternatives Evaluate advantages and disadvantages of each choice. Choose one. Act on your choice. Review your decision.

1-2 page 15 Review Answer the questions.

Economic Systems 3 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?

Types of Economic Systems Command Economy-resources owned and controlled by government. Personal economic freedom is limited. China, Russia, Market Economy-resources owned and controlled by the people in the country. Marketplace is where goods and services exchange hands. U.S. Traditional Economy-used in countries that are less developed and not participating in global economy. Third world countries Mixed Economy-combines command and market elements. Many of the former command countries are now mixed.

U.S. Economic System Capitalism-private ownership of resources by individuals, rather than government. Individual freedom is vital to success.

Four Principles of U.S System Private Property Freedom of Choice Profit Competition

Activity Go to www.state.gov What type of economy does your country have? Compare it to U.S. What type of goods and services are in the country? What do they export? What do they import? Are needs and wants being satisfied in the country based on exports and imports? How does its location affect trade?

Supply & Demand Consumer-person who buys and uses good and services. Producers-individuals and organizations that determine what products & services will be available for sale.

Demand & Supply Consumers set demand. Demand-Quantity of goods or services that consumer are willing and able to buy Demand tells a business what type and what quantity of products and services to supply.

Supply Refers to the quantity of good or service that businesses are willing and able to provide. Heavy competition for a product keeping prices the low or if customers are tiring of an older product, businesses are less likely to want to offer product for sale.

Determining Price Factors influencing demand. Consumers wants (or demand) prices tend to go up. Factors influencing supply. Large supply of products prices remain low. As prices decrease, number of consumers willing and able to purchase product (demand) will increase.

Market Price Point where supply and demand are equal. IF product is demanded price will go ?