Producers and Consumers Economics Study Guide Currency Currency is the form of money that people in a country use. Goods and Services Goods are things people make, buy or sell. ex) food and clothing Services work people do for other people. ex) Dog walker, hair stylist Spending and Saving A budget is a plan for your money. Having a budget allows you to decide how much money you can save or spend. An income is the money earned from working. Some ways you can earn income would be: -Babysitting -Allowance Producers and Consumers A producer is someone who makes and sells goods, or provides a service. ex) clothing store, restaurant, farmer A consumer is someone who buys goods and services. ex) you, me, anybody buying something. interdependence – when producers and consumers depend on each other. People need goods and services provided by other people. Entrepreneur An entrepreneur is someone who starts their own business ex) someone who starts a pet walking business or opens their own restaurant.

Making Decisions: Cost and Benefit Productive Resources Natural Resources are resources found in nature. ex.) trees, vegetables, fish, soil, and cotton Human Resources are skills, knowledge, and labor people do in their job. ex.) teachers, police officers Capital Resources are tools or equipment that people use at their job. ex.) computers, wrenches, scissors A baker may use the following capital resources to help him in a bakery: Mixer Oven Taxes Taxes- money paid to the government. Taxes pay for Government services. ex) schools, libraries, police and fire departments, parks Supply and Demand The price of an item depends on supply and demand. Supply is how many there are total of a certain good. Demand how many people want that good. ex) Think about having 10 candy bars for 15 students. There would not be enough supply (candy bars) for the demand (number of students). Making Decisions: Cost and Benefit Benefit - a positive result when purchasing a good or service Cost - the negative result when purchasing a good or service ex) Jason saves his money to buy a new Wii game. While shopping, he notices a toy car he wants to buy. He doesn’t have enough money to buy both so he decides to buy the toy car. The cost of the decision is he has to wait longer to buy the new Wii game. The benefit is he gets the new toy car.