The Fundamentals of Economics Economics: the study of how people and nations use their limited resources to try and satisfy wants and needs Governments guide and regulate economies

Every economy has: PRODUCERS (people who make goods/services) DISTRIBUTORS (people who get products to buyers) CONSUMERS (People who purchase goods/services) LABOR (the work people do or workers themselves) CAPITAL (money/resources necessary to purchase or invest in production) ENTREPRENEURS (risk-takers who use the other factors of production for profits)

All economies answer three questions: What and how much should be produced How should goods and services be produced Who gets the goods and services that are produced?

Classifying economic systems: METHOD #1: How the economies work Traditional (what it is based on, i.e. agriculture, fishing, bartering, etc.) Market Command Market (determined by what buyers) Command (determined by government)

METHOD #2: classify by how it is related to political beliefs Capitalism Socialism Communism Mixed