1. Ch. 1 Economic Systems and Systems
1.1 Satisfying Needs and Wants
1.2 Economic Choices
1.3 Economic Systems
1.4 Supply and Demand

2. 1-1 Satisfying Needs & Wants
You will be able to after lesson one…
Compare and contrast needs & wants
Distinguish between goods and services
Describe the types of economic resources

3. Chapter 1 - Economic Decisions
*Needs Vs. Wants
Needs - Necessary for survival
i.e. food, shelter, clothes
Wants - Not necessary for survival - bring comfort
i.e. stereo, television, chewing gum
*Abraham Maslow’s Hierarchy of Needs
Self Actualization
Esteem
Social
Safety
Physiological

4. Goods & Services Goods - things you can see and touch = tangible
T-Shirts, football, CDs
Services - Efforts provided by people, equipment, or technology
Haircut, movies in a theatre
Economic Resources (Factors of Production) - The means through which goods and services are produced (3 types)
Natural Resources - Raw materials supplied by nature
Iron ore, gold, water, fish, etc.
Human Resources - People who work to produce goods and services
Laborers (Entrepreneur-a risk taker who uses resources to create a new products or service)
Capital Resources - Tools, equipment, buildings that are used to produce goods and services
Factories, computers, trucks, etc.
Money $ $ $ (needed to run a business)

5. Extra Stats!
The U.S. is the largest producer of goods and services in the world.
We are also the largest consumer!
Oil consumption
Creates more jobs + and higher STOL
Controlling pollution –
Preserving natural resources –
Produce more garbage per person per year than any other country 

6. Key Concepts
Pg. 11
Answer #1-3/4
Cengage Brain

7. 1-2 Economic Choices Goals: Describe the basic economic problem
Explain the steps in the decision-making process

8. The Basic Economic Problem
SCARCITY - THE BASIC ECONOMIC PROBLEM!
PRIORITIZE!
Scarcity – not having enough resources to satisfy every need
Forces us to make choices
Implement a budget
Economic Decision Making – the process of choosing which wants, among several options will be satisfied.

9. Choices, choices, choices
Trade – 0ff – when you give up something to have something else…
Opportunity cost – the value of the next-best alternative that you did not choose.
The benefit you get from your choice should be greater than the benefit from the next-best choice.
Businesses carefully calculate the opportunity costs of decisions before making a decision about how money will be invested

10. Decision-Making Process
Six Steps
1. Define the Problem
What is the central issue?
Must be defined in order to make a decision that will lead to a solution
2. Identify Choices
How many are there?
What is the opportunity cost?
The forgone benefits. What you are giving up by choosing one situation over another i.e. Movie vs.bowling. Movie wins, bowling is the opportunity cost.
3. Evaluate Choices
Look at the advantages and disadvantages of each choice/alternative

11. Decisions, Decisions, Decisions
4. Choose One
The best one for the particular time
5. Act on Your Choice
Just do it!
6. Review/Evaluate Your Decision
Did you define the problem correctly?
Did you look at all the available choices?
Did you act at the necessary time?

12. Decisions, Decisions, Decisions
Share a decision with me that you had to make over the weekend.
Describe, for each decision step, what happened
Define the issue/problem
Identify choices. What choices were available to you?
Evaluate choices. What were the pros and cons of each option?
What did you choose to do (choose one)?
Act on it – no explanation needed
How did it go (evaluate the decision)?

13. 1.2 KEY CONCEPTS
Pg. 15
Answer #1-4
Cengage