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What is economics? Part one
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What is Economics? Economics Choose use Resources Satisfy Wants Factors of Production / Productive Resources human resources (labor) capital resource (tools) natural resources (land) entrepreneurship (risk) Gross domestic product (GDP) standard of living Goods (objects) Services (activities) Gross domestic product scarcity choices What Produced Production How Distribution Who Consume Consumption Economic System Command Market Organize Scarce Limited Scarcity Options Economics is about how people choose to use their limited or scarce resources to satisfy their unlimited wants (for goods and services).
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How do people get the resources they need & want?
EQ Essential Question Economics How do people get the resources they need & want?
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What are the 4 types of productive resources (factors of production)?
Economics Choose use Resources Satisfy Wants Factors of Production / Productive Resources human resources (labor) capital resource (tools) natural resources (land) entrepreneurship (risk) Gross domestic product (GDP) standard of living Goods (objects) Services (activities) Gross domestic product scarcity choices What Produced Production How Distribution Who Consume Consumption Economic System Command Market Organize Scarce Limited Scarcity Options human resources capital resources natural resources entrepreneurship AKA labor, skills AKA tools, capital goods AKA land, raw materials AKA risk
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What is Economics? human resources (labor) capital resource (tools)
Choose use Resources Satisfy Wants Factors of Production / Productive Resources human resources (labor) capital resource (tools) natural resources (land) entrepreneurship (risk) Gross domestic product (GDP) standard of living Goods (objects) Services (activities) Gross domestic product scarcity choices What Produced Production How Distribution Who Consume Consumption Economic System Command Market Organize Scarce Limited Scarcity Options Economics is about how people choose to use their limited or scarce resources to satisfy their unlimited wants. Every society has limited Factors of Production / Productive Resources human resources (labor) capital resource (tools) natural resources (land) entrepreneurship (risk)
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HUMAN RESOURCES CAPITAL RESOURCES Human capital Workers Skills Education Knowledge Labor Talents health Physical Strength Capital goods Tools Manufactured (factory-made) Factories equipment transportation Buildings Roads Machinery
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Which are used to produce . . .
Factors of Production / Productive Resources human resources (labor) capital resource (tools) natural resources (land) entrepreneurship (risk) Which are used to produce . . . Goods + Services = (objects) (activities) Gross Domestic Product (GDP)
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How much can you complete?
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WHY? investing increases GDP & standard of living
Every society has limited Factors of Production / Productive Resources human resources (labor) capital resource (tools) natural resources (land) entrepreneurship (risk) WHY? investing increases GDP & standard of living
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3 basic economic questions . . .
However, because of scarcity, choices must be made to answer the 3 basic economic questions . . . scarcity choices What Produced Production How Distribution Who Consume consumption What goods & services will be produced? = Production How will goods & services be produced? = Distribution Who will consume the goods &services? = Consumption
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This creates the need for an
Economic System Command Market organize Economic System MIXED (combination) Command (controlled) Market (free) to organize production, distribution, and consumption.
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How a country organizes it’s resources:
Who decides production, distribution, and consumption of goods and services? MIXED SOME gov’t control MARKET COMMAND NO gov’t control FULL gov’t control Economic Systems MIXED LITTLE gov’t control MIXED LOTS of gov’t control
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What is the basic economic problem?
Every society must decide how to make the best use of its limited productive resources. Scarcity, with the resulting need to choose among competing options, is the basic economic problem.
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