1. MARKET ECONOMIES Compare three types of economies
Lesson 1.1
7/2/2019
LESSON 1.1
MARKET ECONOMIES
Compare three types of economies
Describe and explain the characteristics of a market economy
INTRO TO BUSINESS

2. 1.1
Economic Systems
Our businesses operate in a global marketplace and deal with a variety of economic systems that influence each other
Countries take different approaches in how their economies operate, but each must provide answers to the same basic economic questions

3. 1.1
Economic Problem
Scarcity is the conflict between unlimited wants and limited resources.
In order to decide how to use its scarce resources, a country must answer three key economic questions.
The answers to these questions depend in large part on the society’s economic system.

4. Key Economic Questions
1.1
Key Economic Questions
1. What to produce?
Should resources be used to provide consumer goods, industrial goods, or military goods?
2. How should things be produced?
What kinds of industries and equipment should be used?
3. For whom should they be produced?
Which of its citizens should benefit most from what is produced?

5. Types of Economic Systems
1.1
Types of Economic Systems
Traditional Economy
Command Economy
Market Economy
In a market economy, businesses and individuals are free to make their own decisions as they buy and sell in the marketplace.
Capitalism means that economic resources are privately owned by individuals rather than by the government.

6. Characteristics of Market Economies
1.1
Characteristics of Market Economies
Private enterprise
Private property
Profit
Competition

7. 1.1
Private Enterprise
An individual’s right to own a business, select a market to enter, and produce with limited government direction is called private enterprise.

8. 1.1
Private Property
Your right to private property means that you can own, use, and dispose of things of value.

9. 1.1
Profit
Profit is the amount of money left over when subtracting the expenses of operating a business from its income—it is a reward for taking risks.

10. 1.1
Competition
Competition is the rivalry among businesses to sell their products and services to consumers.

11. MAKE DECISIONS Explain how an economy meets its needs and wants
Lesson 1.2
7/2/2019
LESSON 1.2
MAKE DECISIONS
Explain how an economy meets its needs and wants
Describe the six-step decision-making process
INTRO TO BUSINESS

12. Providing Needs and Wants
1.2
Providing Needs and Wants
The needs and wants of a society are met through the production of goods and services.
This production requires the use of economic resources.

13. Needs and Wants Needs are things that are required in order to live.
1.2
Needs and Wants
Needs are things that are required in order to live.
Wants are things that are not necessary for survival, but add comfort and pleasure to our lives.

14. Goods and Services Goods are things you can see and touch.
1.2
Goods and Services
Goods are things you can see and touch.
Services are activities that are consumed at the same time they are produced.

15. 1.2
Economic Resources
The means through which goods and services are produced are called economic resources or factors of production.
There are three kinds of economic resources:
Natural resources
Human resources
Capital resources

16. Economic Decision Making
1.2
Economic Decision Making
Economic decision making is the process of deciding among several alternative wants to determine the one most desired.

17. The Decision-Making Process
1.2
The Decision-Making Process
Review Your Decision 6
GOOD
DECISION
Act on Your Choice 5
Choose One 4
Evaluate Choices 3
Identify Choices 2
Define Problem 1
PROBLEM

18. HEALTHY ECONOMIES Discuss three measurements of an economy's health
Lesson 1.3
7/2/2019
LESSON 1.3
HEALTHY ECONOMIES
Discuss three measurements of an economy's health
Name and describe the four phases of a business cycle
INTRO TO BUSINESS

19. Economic Measurements
1.3
Economic Measurements
Three measurements used in looking at the health of an economy are:
Gross domestic product (GDP)
Labor productivity
Inflation and deflation

20. Gross Domestic Product (GDP)
1.3
Gross Domestic Product (GDP)
Gross domestic product (GDP) is the total dollar value of all goods and services produced in an economy in one year.
It is a basic measurement of how an economy is doing.

21. GDP Includes Four Major Categories
1.3
GDP Includes Four Major Categories
1. Consumer spending for food, clothing, and housing
2. Business spending for buildings, equipment, and supplies
3. Government spending to pay employees and to buy supplies and other goods and services
4. The exports of a country less the imports of the country

22. 1.3
Labor Productivity
The measurement of the number of items produced per worker is called productivity.
In a simple model, productivity is computed by dividing the output (the number of units produced) by the input (the number of hours worked).
Productivity =
Number of units produced (output)
Number of hours worked (input)

23. Inflation and Deflation
1.3
Inflation and Deflation
A sustained increase in the general level of prices for goods and services is called inflation.
Deflation is a sustained decrease in the general level of prices for goods and services.

24. 1.3
The Business Cycle
The movement of the economy from one condition to another and back again is called a business cycle.
Business cycles have four phases:
Prosperity
Recession
Depression
Recovery

25. 1.3
Prosperity
Prosperity is the phase where most people who want to work are employed and businesses produce goods and services in record numbers.
Wages are good.
The demand for goods and services is high.
Prosperity does not go on forever.

26. 1.3
Recession
Recession is a phase of the business cycle where demand for goods and services begins to decrease, production decreases, unemployment begins to increase, and GDP growth slows down.
A decrease in the use of economic resources and a lower demand for goods and services signal this phase of the business cycle.

27. 1.3
Depression
Depression is a phase of the business cycle marked by a prolonged period of unemployment, weak sales of goods and services, and business failures.
GDP falls rapidly during a depression.
During the Great Depression of the early 1930s, the unemployment rate reached 25 percent.

28. 1.3
Recovery
Recovery is the phase in which unemployment begins to decrease, demand for goods and services begins to increase, and GDP begins to rise again.
Recovery leads an economy into the most-welcome business cycle, prosperity.

29. PARTICIPATE IN AN ECONOMY
Lesson 1.4
7/2/2019
LESSON 1.4
PARTICIPATE IN AN ECONOMY
Define three economic roles and state how they affect supply and demand
Discuss standard of living and quality of life
INTRO TO BUSINESS

30. Economic Roles Citizen Worker Consumer
1.4
Economic Roles
Citizen
a legally recognized subject or national of a state or commonwealth, either native or naturalized
Worker
an employee in an organization
Consumer
a person who purchases goods and services for personal use

31. 1.4
Supply and Demand
Demand is the relationship between the amount of a good or service that consumers are willing and able to buy and the price of the good or service.
Supply is the amount of a good or service that businesses are willing and able to provide and the price of the good or service.

32. Supply and Demand Effect on Price
1.4
Supply and Demand Effect on Price
Demand
As the demand for a good or service increases, the price tends to go up.
As demand begins to fall, the price generally goes down.
Supply
When a product is in short supply, prices tend to increase if the demand stays the same.

33. Your Economic Well-Being
1.4
Your Economic Well-Being
Standard of living refers to the way you live as measured by the kind and quantity of goods and services you can afford.
Quality of life is the satisfaction and enjoyment that you get from your life.