Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE1 CHAPTER Satisfying Needs and Wants Economic Choices Economic Systems Supply and Demand Economic Decisions and Systems

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE2 Satisfying Needs and Wants Learning Target: Students will be able to: Explain the difference between needs and wants. Distinguish between goods and services. Describe the types of economic resources. 1-1

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter 1 3 NEEDS AND WANTS Needs are essential Wants add to the quality of life Needs and wants are unlimited

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter 1 4 ECONOMIC RESOURCES Natural: water, land, trees, animals, and minerals. Human: labor (people who run farms and factories, transport goods, provide services, or manage businesses). Capital: money, land, buildings, tools, and equipment

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE5 Economic Choices Learning Target Students will: Understand the basic economic problem. Explain the steps in the decision-making process. 1-2

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter 1 6 THE DECISION-MAKING PROCESS 1.Define the problem. 2.Identify the choices. 3.Evaluate the advantages and disadvantages of each choice. 4.Choose one. 5.Act on your choice. 6.Review your decision.

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE7 Economic Systems Learning Target Students will be able to: Identify the three economic questions. Differentiate among the main types of economic systems. Describe the economic system of the United States. 1-3

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter 1 8 THE THREE ECONOMIC QUESTIONS What to produce? How to produce? What needs and wants to satisfy? A nation’s plan for answering these three questions is called it’s economic system.

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter 1 9 TYPES OF ECONOMIC SYSTEMS Command economy – resources are owned and controlled by the government Market economy – resources are owned and controlled by the people Traditional economy – good & services produced the same; less developed countries Mixed economies – combines elements of command and market economy

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter 1 10 THE U.S. ECONOMIC SYSTEM Private property Freedom of choice Profit Competition Four principles of the U.S. economic system:

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE11 Supply and Demand Learning Target Students will be able to: Describe supply and demand. Discuss how supply and demand affect prices of products and services. 1-4

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter 1 12 PARTICIPATING IN A MARKET ECONOMY Consumers set demand Producers establish supply

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter 1 13 Checkpoint >> Checkpoint >> How does the price of a product affect demand and supply? Answer As prices decrease, the number of consumers willing and able to purchase the product will increase and demand will rise. As prices increase, the number of consumers willing and able to purchase the product will decrease and demand will decrease.