Economics

Economics Defined Economy: the organized way a nation provides for the needs and wants of it’s people Economics: the management of the production, distribution and consumption of goods and services meeting unlimited wants with limited resources

Economic Activities Production: Make It! Consumption: Use It! Exchange: Trade It! Distribution: Give It Out!

Economic Resources Human Resources (entrepreneurship) Natural Resources Capital Resources

Human Resources People Examples: Full-time Part-time Seasonal temp There may be a shortage of workers for a certain job or profession: People lack training or skills needed People are not interested in filling certain jobs

Natural Resources Resources found in nature that can be used to produce goods or services Examples: Wildlife Plant life Weather conditions Minerals Natural gas Natural resources become economic resources when used in production of goods and services

Capital Resources Used to produce a finished product Reflects the state of technology that exists in society Examples: Machinery Buildings Transportation Furniture, Computer equipment (technology)

RESOURCES Economic Resources HUMAN NATURAL CAPITAL Why is resource limited? Must be willing and able, lack of training HUMAN Earth is finite, pollution, wrong season, drought RESOURCES NATURAL Break (need repair), don’t last, poor quality CAPITAL

Human Resources Affect on Business How do employers deal with a shortage of workers for a certain job or profession? Offer higher wages Offer training and retraining Increase promotions/incentives Increase technology

Natural Resources Affect on Business All natural resources are limited Some of the earth’s resources are difficult and costly to obtain Not all countries have the ability to tap into all of their natural resources (lack technology and equipment) When natural resources are limited, prices go up on products that require these resources (gas)

Capital Goods Affect on Business Companies try to maintain the capital goods they already have to minimize cost Companies look for alternative capital goods to increase profit and get an edge of competitors They modify current technology to become more efficient

Three Economic Questions What countries ask themselves when considering economic decisions What product or services to produce? How to produce those products and services? For whom to produce the products and services?

Goods and Services Goods: Tangible Services: Intangible Can touch item Cannot touch item

Needs vs. Wants Needs: something you have to have (required) Water, clothing, food Wants: something you would like to have (desire) Designer clothes, sports car

Economic Wants Non-economic Wants: Economic Wants: Love, winning, good grades Economic Wants: Material items, food

Scarcity Unlimited Wants MINUS Limited Resources EQUALS Scarcity The difference between what consumers want and need and what the available resources are. Unlimited Wants MINUS Limited Resources EQUALS Scarcity

Economic Choices Trade off: Having to make a choice between two or more things Opportunity Cost: Everything you gave up by making that choice Trade Off Option A Option B or Opportunity Cost

Activity Use the Local paper to analyze the 3 types of Economic Resources (Human, Natural, Capital) Find at least 2 examples of each resource List page number & newspaper date/week Define its impact on the local economy Human Natural Capital Find at least 2 examples of each resource List page number & newspaper date/week Define its impact on the local economy