1-1 Satisfying Needs & Wants Goals: Explain the difference between needs & wants Distinguish between goods and services Describe the types of economic resources

Chapter 1 - Economic Decisions *Needs Vs. Wants Needs - Necessary for survival i.e. food, shelter, clothes Wants - Not necessary for survival - bring comfort i.e. stereo, television, chewing gum *Abraham Maslow’s Hierarchy of Needs Self Actualization Esteem Social Safety Physiological

Goods & Services Goods - things you can see and touch = tangible T-Shirts, football, CDs Services - Efforts provided by people, equipment, or technology Haircut, movies in a theatre Economic Resources (Factors of Production) - The means through which goods and services are produced (3 types) Natural Resources - Raw materials supplied by nature Iron ore, gold, water, fish, etc. Human Resources - People who work to produce goods and services Laborers Capital Resources - Tools, equipment, buildings that are used to produce goods and services Factories, computers, trucks, etc. Money $ $ $ (needed to run a business)

Key Concepts Pg. 11 Answer #1-3

Assignment NO COPY PASTE! When you are done, research a resource that is scarce…describe the resource, why it is scarce, and statistics related to that resource. Natural, Human, Capital 1 page-double spaced summary (your own words) report Times New Roman 12 pt. font Indent new paragraphs Include the site you used. Cite your source!

1-2 Economic Choices Goals: Understand the basic economic problem Explain the steps in the decision-making process

The Basic Economic Problem SCARCITY - THE BASIC ECONOMIC PROBLEM! PRIORITIZE! Scarcity – not having enough resources to satisfy every need Forces us to make choices Implement a budget Economic Decision Making – the process of choosing which wants, among several options will be satisfied.

Choices, choices, choices Trade – 0ff – when you give up something to have something else… Opportunity cost – the value of the next-best alternative that you did not choose. The benefit you get from your choice should be greater than the benefit from the next-best choice. Businesses carefully calculate the opportunity costs of decisions before making a decision about how money will be invested

Decision-Making Process Six Steps 1. Define the Problem What is the central issue? Must be defined in order to make a decision that will lead to a solution 2. Identify Choices How many are there? What is the opportunity cost? The forgone benefits. What you are giving up by choosing one situation over another. i.e. Movie vs.bowling. Movie wins, bowling is the opportunity cost. 3. Evaluate Choices Look at the advantages and disadvantages of each choice/alternative

Decisions, Decisions, Decisions 4. Choose One The best one for the particular time 5. Act on Your Choice Just do it! 6. Review/Evaluate Your Decision Did you define the problem correctly? Did you look at all the available choices? Did you act at the necessary time?

Decisions, Decisions, Decisions Share a decision with me that you had to make over the weekend. Describe, for each decision step, what happened Define the issue/problem Identify choices. What choices were available to you? Evaluate choices. What were the pros and cons of each option? What did you choose to do (choose one)? Act on it – no explanation needed How did it go (evaluate the decision)?