1. Supply, Demand & Profit More on Economics & Work

2. Supply, Demand & Profit Profit = Money left over after all expenses are paid It helps create new jobs Provides funding to train workers Used to clean up industrial pollution Market = Group of people or organizations that purchase a particular good/service

3. Supply, Demand & Profit Market Research = a collection of info used to determine what consumers want to buy Opportunity cost = A resource/benefit given up to gain something else Comparative advantage = Ability of a producer to produce a good/service at a lower opportunity cost

4. Supply, Demand & Profit Distribution System = Steps involved in bringing products & services from their point of origin to the consumer Factory  Warehouse  Retail Shop  Consumer What other things are included in this system? (think people)

5. Supply, Demand & Profit Demand = The willingness of a consumer to buy a good/service at a certain price Supply = The willingness of a producer to provide a good/service at a certain price

6. Supply, Demand & Profit Competition = striving against others to win something. Wendy’s & McDonald’s & Burger King are competitors Monopoly = complete control, no competition in the market. Antitrust Laws = laws that prohibit attempts by businesses to monopolize a market.

7. Class Competition Your job is to design a t-shirt that could be sold at Urbana H.S. athletic events (you have 10 minutes) T-shirts cost $2 each. Ink costs $1 per shirt There is also a labor cost in making shirts. How much would you pay for your t-shirt? (confer with your group and come to a $)

8. Economy & You Continued Recall – Supply & Demand Economic System – method a society uses to determine how it will use and distribute available resources (resource allocation) Scarcity – when you have limited resources compared to wants Limited Resources – resources that have a limited supply (natural, labor, etc) ECONOMY = Greek for “management of a household”

9. Economy & You Continued Free Enterprise System – People can own the means of production, use them as they see fit and freely operate their business. (Also called capitalist system or market system) Communist System – Government controls the means of production.

10. Economy & You Continued GOODS vs SERVICES Industrial Products – goods that are produced for and sold to other producers SERVICES – tasks that other people or machines perform that cannot be physically weighed or measured

11. Economy & You Continued The Federal Reserve (refresher) Network of 12 regional banks that regulate banking in the U.S.

12. Economy & You Continued ECONOMIC CYCLE There are 4 parts to the Economic Cycle

13. Economy & You Continued GROSS DOMESTIC PRODUCT (GDP) – is the total value of goods and services that a nation produces for the marketplace during a single year (i.e. value of investments, of government purchases, goods exported, goods imported, etc.) = GDP When the things above decline, the economy goes into recession. When demand is higher than availability AND prices increase over time there is inflation.

14. Economy & You Continued INFLATION (cont) Inflation is good for the economy. It is a sign that the economy is working. However…. Inflation can be bad for consumers. It means your dollar buys less than it used to!