LCJSMS WE THE STUDENTS 8 TH GRADE 2013 Economics

Scarcity and Opportunity Cost Scarcity - insufficient resources or goods Opportunity Cost - The value of the alternative of paying for something instead of doing something else.

ECONOMIC GROWTH Gross Domestic Product or GDP Is the total value of all final domestic PRODUCTION in a nation for a given year. it can be measured by the income approach or the expenditure approach the income approach (what was earned) should always equal the expenditure approach (what was spent) assuming all the money made was spent (a nation's income and expenses should be identical)

NEEDS vs WANTS NEEDS: Food, Water, Shelter WANTS: Money, Transportation, Electronics ECONOMICS is how people behave based on needs and wants.

SIX FACTORS THAT INFLUENCE ECONOMIC GROWTH 1. LAND - as well as natural resources 2. CAPITAL - Human Capital : education, skills and abilities of people in a nation Physical Capital: tools, factories and equipment used in the production process. 3. LABOR - a skilled and growing labor force

SIX FACTORS THAT INFLUENCE ECONOMIC GROWTH 4. ENTREPRENEURS - owner of a business who attempts to make a profit 5. GOVERNMENT POLICIES AND SPENDING Money collected by taxes can improve quality of public services. 6. PRODUCTIVITY - the level in which productive resources are used efficiently.

SUPPLY or DEMAND Demand - your ability and willingness to pay for a particular item. Supply - the amount of a good or service a seller offers for a particular price at a particular time.

LAW OF SUPPLY Law of Supply - states that if the price of something increases, producers will produce or offer more. - states that if the price of something decreases, producers will produce or offer less

LAW OF DEMAND Law of Demand - states that as the cost of something increases, the people will demand or buy less. - if the cost of something decreases, people will demand or buy more

SUPPLY AND DEMAND - So.... If supply goes up, demand goes down - prices go DOWN. If supply goes down, demand goes up - prices go UP.

IMPORTANT TERMS CONSUMER - a person who uses a good or service MANUFACTURERS - a person or business who makes a good MARKET ECONOMY - an economic system where buyers and sellers trade goods and services using the laws of supply and demand. PRODUCT - all goods and services

GOODS AND SERVICES Goods - things people make or grow then sell Such as : flowers, crops, cars, electronics. Service - jobs that one person does for another. Such as : Doctor, Chef, Police Officer

CONSUMPTION Consumption is the act of purchasing goods and services. (Shopping) ** If there is increased consumption people are spending more and saving less. ** If there is decreased consumption people are spending less and saving more. Disposable income, is your income after your pay taxes Durable Goods- items like cars, appliances and furniture.

SALARY TERMS Gross Pay -- Total Salary Net Pay - Salary AFTER taxes are deducted.

PRICE When supply meets demand, a PRICE is born. Price is based on supply and demand.

BARTER vs MONEY Barter - exchanging one good or service for another good or service. Example - Farmer trades eggs for a fresh loaf of bread. Money - is anything that functions as a medium of exchange, store of value or standard of value.