The Economy and You Economics' Starting Points: Wants and Needs

TODAY’S OBJECTIVES 1.You will be able to state the difference between wants and needs 2.You will be able to state the difference between goods and services 3.You will be able to describe how limited resources relate to wants

Why it’s 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.

An Abundance of Wants Wants are the things you wish you could have… –Private Wants….each persons has personal wants. –A group of people may also share the same wants. Although these wants are shared, they are considered Private Wants. …choose which type of car …choose which type of bike …choose which computer system

An Abundance of Wants –Public Wants….widely shared by many people -for the most part Federal, State, and Local Government satisfies most public wants. Such as highways, water, education

Satisfying Wants and Needs … with Goods and Services Needs are necessary wants –Food, shelter, clothing are 3 basic needs BUSINESSES SATISFY WANTS AND NEEDS BY PROVIDING: Goods can be physically weighed or measured satisfy your wants and needs for material things that you can see and touch… tangible Services are tasks that people or machines perform satisfy some of your wants for things you can’t see or touch. ….they are intangible

Is it a Goods or Service?

Unlimited Wants, Limited Resources Most people have unlimited wants for goods and services. The more money you make, the more goods or services you want.

Unlimited Wants, Limited Resources Resources is anything that people use to make or obtain what they need or want Resources limit the number of wants you can satisfy Examples of resources include fuel, timber, labor, money

Unlimited Wants, Limited Resources People make the most of their resources by making the right choices about what to buy. The problem of unlimited wants and limited resources affects individuals, companies, and nations.

Economics’ Starting Points RESOURCES Anything people can use to make or obtain what they want or need WANTS Things you wish you could have NEEDS Necessary wants GOODS Tangible Material ThingsGOODS Tangible Material ThingsSERVICES Tasks PerformedSERVICES Tasks Performed

What should I do? Some decisions you will soon have to make. Which car to buy? Which college to attend? How should I decorate my room?

Deciding on your Resources Every day you have opportunities to make choices Decision-making process is a step-by-step method to carefully consider alternatives that result in better choices. Step 1 - Identify the problem Step 2 - List the alternatives Step 3 - Determine the pros and cons Step 4 - Make the best decision Step 5 - Evaluate your decision

What is Business Business is any activity that seeks a profit by providing goods and services to others. Wants and needs are usually satisfied by Business Businesses provide you with necessities. Businesses also provide people with the opportunity to become wealthy.

Business Activities 1.Determine opportunities for goods/services (Market Research) 2.Evaluate the demand for the goods/services…will enough consumers want the item at a price that is profitable for the business? (Market Research) 3.Obtain Funding – a business needs both start-up money and operating capital. (Finance)

Business Activities 4. Sets up and manages all the factors of production (Procurement/Supply Chain) equipment, buildings, people, and raw materials 5. Produces the good/service (Production) 6. The company markets the good/service by deciding where to sell it and how to advertise it. (Marketing) 7. Keeps records to satisfy requirements of the government and to analyze how to improve the production and sales. (Accounting)

Business Motivation Profit is the amount of money left over after a business has paid for the cost of producing its goods and services. –Profit is the motivation for taking the risk to start a business. –A business is profitable when the sales are high and the costs are kept low Sales $100,000 Costs-$ 60,000 Profit $40,000

Business Motivation Companies thrive on competition, or the contest between businesses to win customers. What motivates business to change when the wants and needs of the people change? Competition

Business and You Businesses make many decisions that impact you. However, you also affect business.

You As A Consumer A person who selects, purchases, uses, or disposes of goods and services is a CONSUMER. A CUSTOMER may only purchase the product but not use it. Businesses are aware of your changing needs and wants.

Customer or Consumer You purchase birthday gifts for your friend

You go grocery shopping to purchase items for a surprise dinner for you and your family Customer or Consumer

You work for Hershey Foods as a Sales Manager and purchase box tickets to the Eagles game that you will give away to your Sales Representatives with the highest sales increases for the 2 nd quarter Customer or Consumer

A parent grocery shopping for their child’s cereal Customer or Consumer

Business and You…You as a Consumer How do consumers affect business? –Consumers decide what kind of products and services you want and where you will buy them.

Business and You… you as a consumer How does business affect you as a consumer? –Business decides what to produce or what services to offer to consumers. –Businesses affect you when they discontinue products. The decision to stop manufacturing products is often because there is a decreasing demand.

Business and You…You as a Consumer When a company is slow to respond to customers’ complaints and doesn’t communicate very well, then customers usually find another company’s product to buy.

Business and You…You as a Wage Earner How does business affect you as a wage earner? –In order to make products and provide services businesses hire people to work. –In business today, workers have more input about how business is done. Decision-making skills Quality of work Input on problems help a business flourish

Self-Discovery in Business What do you need to be a wise consumer, a good employee, or a successful business owner? –BUSINESS KNOWLEDGE –how to get the most from your spending now and from your future income. –The more education you have the better your income. –When you become a business owner, manager, or employee, you’ll need business knowledge.

What Do You Like? Learn as much now in order to make an informed decision in the future. Explore all the business opportunities in order to see what is available to you in order to satisfy your wants and needs.

Self-Discovery Why is it important to learn as much as possible about yourself and the world of business? –What happens in business and government will make a difference in you and your family’s lives as consumers and as workers. –Knowledge helps you understand the role of jobs in today’s economy. –The more you know about yourself the better you will be able to choose the right career for yourself