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 1. Production: Make It! 2. Consumption: Use It! 3. Exchange: Trade It! 4. 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)

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

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 1. What product or services to produce? 2. How to produce those products and services? 3. For whom to produce the products and services?

Goods and Services  Goods: Tangible  Can touch item  Services: Intangible  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:  Love, winning, good grades  Economic Wants:  Material items, food

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  Students will complete a short activity containing 7 process questions  Students may use class notes to complete this activity