Chapter 1 A Look At Wants & Needs

Learning Objectives 1. State the differences between wants and needs. 2. Describe how limited resources relate to wants. 3. Identify business activities that are used for products and services. 4. Explain the relationship between business and you.

Why Is This Important? Businesses satisfy people’s basic needs all the way to their lavish wants. Competition and profit motivate these businesses to continually strive for your business.

Economic Starting Points Wants - the things you wish you could have. Examples: bike, TV, CD, candy, etc. Needs - the things you need to have to survive; necessary wants. Examples: food, water, clothing, shelter, etc.

Wants Private wants - wants that are desired by individuals, families, or a small group of people. Examples: computer & swimming pool Public wants - wants that are desired by a large amount of people. Example: highways, education, & water

Goods & Services Goods - can be physically weighed or measured. Example: groceries, telephone, bike, etc. Services - tasks that people or machines perform. Example: cutting hair, manicure, etc.

Unlimited Wants/Limited Resources Most people have unlimited wants for goods and services. Most people in the United States have their lower-order needs met. Therefore, businesses advertise those things that will appeal to our higher-order needs. Most people DO NOT have enough resources <MONEY> to satisfy all of their wants. Individuals, businesses, & nations must make the best use of limited resources.

The Decision Making Process People make the most of their resources by making the right choices about what to buy. The decision making process is a step-by-step method to carefully consider alternatives that result in better choices.

5 Steps In The Decision Making Process 1. Identify the problem. 2. List the alternatives. 3. Determine the pros and cons. 4. Make the best decision. 5. Evaluate your decision.

What Is Business? Business is any activity that seeks profit by providing goods or services to others. Wants & needs are satisfied by business. Businesses provide necessities. Businesses provide individuals with an opportunity to become wealthy.

What Business Does 1. Business must organize the people and the equipment to provide the product. 2. People within the organization manage the company’s resources to produce the product. 3. The company then markets the product or service by deciding where to sell it and how to advertise it.

Businesses’ Motivation Profit - the amount of money left over after a business has paid for the cost of producing its goods and services. Competition - contest between businesses to win customers. Based on the changing wants and needs of customers.

Business & You Businesses make decisions that impact you. Such as, what to produce. You make decisions that affect business. Such as, what you purchase and when you purchase it. Business & You are interdependent.

You As A Consumer Consumer - person who selects, purchases, uses, or disposes of goods or services. Your changing needs cause businesses to produce more, less, or discontinue a product or service. Learning how to get the most from your spending is important. The more education you have the better your income.

You As A Wage Earner Businesses hire you and provide you with a wage. Workers today have input into how business is run and how things are produced. Your career decision affects business.

Self-Discovery In Business A broadcast journalist talks about the price of consumer goods. Later, a reporter mentions that a major online company filed for bankruptcy. The federal govt. announces a change in interest rates.

What difference does it make? Will it influence your life? Your friends? Your Family? Do the actions of the government and businesses have any impact on you?

Change come faster and faster. More than ever before, you need to understand the world you live and work in. What happens in business and government will make a difference in your life. Change come faster and faster. Companies come and go, and new types of companies continually appear.