1. Unit 2 Entrepreneurship & The Economy

2. Economics Social science concerned with how people satisfy their demands for goods and services

3. Scarcity Demand for goods and services is larger than the supply that can be provided

4. Scarcity Can you think of a situation where a resource was scarce?

5. Economic System Method used by a society to allocate goods and services among people and to copse with scarcity

6. Types of Economic Systems 1.Command Economy 2.Market Economy 3.Mixed Economy

7. Command Economy Government controls production, allocation and prices of goods and services China, Cuba, North Korea

8. Command Economy How would life be different if we lived in a command economic system?

9. Command Economy Assign jobs Choose college Set wages Where to live Control what you could buy or own Could you live with these limitations?

10. Market Economy Suppliers and consumers control the production, allocation and prices of goods and services USA, Canada, Australia

11. Capitalism Individuals are free to own and trade goods and invest cash in business

12. Mixed Economy Blends elements of the command economy with the market economy

13. Assignment Textbook page 21 Read Entrepreneurial Profile. Answer questions 1-3

14. Fundamental Questions of Economics 1.What goods and services are produced? 2.What quantity of goods and services are produced? 3.How are goods and services produced? 4.For whom are goods and services produced?

15. Voluntary Exchange Transaction where both suppliers and consumers believe they benefit

16. Supply Quantity of goods and services a business is willing to sell at a specific price and time

17. Demand Quantity of goods and services consumers are willing to buy at a specific price and time

18. Supply Curve Line on a graph that shows the quantity of product or service a supplier is willing to sell across a range of prices

19. Demand Curve Line on a graph shows the quantity of a product or service consumers are willing to buy across a range of prices

20. Supply and Demand Curve Graph that includes both a supply curve and a demand curve. Shows the relationship between price and quantity of a product that is supplied and demanded

21. Equilibrium Point Where the sully curve and demand curve meet

22. Equilibrium Quantity Quantity at which the supply equals the demand

23. Equilibrium Price Price at which the supply equals the demand

24. Assignment Groups- Prepare a presentation about a brand name product that is priced higher than competition. Is the brand worth the additional price?

25. Competition Between Suppliers- Keeps prices down Between Consumers- Push prices higher

26. Benefits of Competition Between Suppliers Push Prices Down Encourages Innovation

27. Profit Motive Incentive that encourages entrepreneurs to take business risks in the hope of making a profit

28. Do you think that profit is good or bad?

29. Economics of One Unit Calculation of the profit or loss for each unit of sale made by a business

30. Economics of One Unit Selling Price- Expense = Profit

31. Profit Margin Profit/Selling Price= Profit Margin

32. Nonprofit Organization Operates solely to serve the good of society

33. Do you think that an entrepreneur who runs a nonprofit is sacrificing the chance to build personal wealth?

34. Assignment Textbook page 39 Complete Assessment 2.1 #1-8

35. Do you care if the products you buy are made in America?

36. Global Economy Flow of goods and services around the whole world

37. Exporting Goods or services are sent from a country and sold to foreign consumers

38. Importing Goods or services are brought into a country from foreign suppliers

39. Impact on Entrepreneurs Export goods that are in demand in foreign countries Import foreign goods or materials cheaper

40. Trade Barrier Government restriction on international trade Tariff Quota

41. Tariff Fee, similar to a tax, that importers must pay on the goods they import

42. Quota Limit on the quantity of a product that can be imported into a country

43. Foreign Exchange Rate Value of one currency unit in relation to another

44. Fair Trade Policy encouraged by private organizations with the goal of ensuring that small producers in developing nations earn sufficient profit on their exported goods

45. Assignment Lookup the exchange rate of Euros to American dollars. If you were taking a vacation to France what impact would this have on you?

46. Local Economy Covers a limited area such as a community or town

47. Entrepreneurs can Benefit Local Economies Purchasing supplies from local merchants Opening account at local bank Paying taxes Investing money in local business Donating money, time, or goods to local charities Hiring local employees Supplying goods and services to local consumers

48. Sustainability Maintain/ Improve the quality of human life and the quality of the environment

49. Assignment Textbook Page 44 Assessment 2.2 Questions #1-5