1. Louisiana’s Economy
Resources and Rewards

2. Basic Economic Concepts
Section 1 - Vocabulary

3. Define goods List examples of goods Goods are physical items Car House
Clothes
Food
Books
Television

4. List examples of people who perform services
Define services
Services are activities people do for a fee.
List examples of people who perform services
Teacher
Postman
Hair Stylist
House Painter
Musicians
Mechanic

5. Define consumer Define producer
A consumer is a person who satisfies a want or need by buying a good or service.
Define producer
A producer is a person or business who uses resources to make goods or provide services.

6. Look at the pictures below
Look at the pictures below. Discuss the consumer and producer from each picture.

7. Define natural resource
Natural resources are gifts from nature
Define human resource
Human resources are people who produce goods or services
Define capital resource
Capital resources are the money and property

8. Discuss the three types of resources found in the photograph below.

9. Define scarcity
Scarcity means that people want or need more than the available resources can supply.
Discuss what happens after a big hurricane. Everyone needs to fix the damages on their homes. People begin to purchase items from the lumber yard. How does scarcity effect this situation.

10. Define opportunity benefit
Opportunity benefit is the item purchased or chosen or the value of the item purchased or chosen when a choice is made
Define opportunity cost
Opportunity cost is the item you did not choose or the value of the next best alternative given up when a choice is made

11. You go to the mall with $60. Make a choice on the items you will purchase. Now explain which item(s) are opportunity cost or opportunity benefit.
$10
$40
$20
$35
$15

12. Define supply Define demand
Supply is the quantity of goods or services offered for sale
Define demand
Demand is the quantity of goods or services people are willing and able to buy

13. Discuss what happens if the everyone in the town of Abbeville goes to McDonald’s on the same day at the same time and orders the exact same thing. What does this have to do with supply and demand?

14. Define profit Profit is the amount left after costs are subtracted.
Price Item Sold for – Cost to Make Item = Profit

15. Define traditional economy
Traditional economy customs, beliefs, and habits determine how the four basic questions are answered.
What to produce
How to produce
How much to produce
For whom to produce

16. Define command economy
Command economy the government controls the economy and answers the four basic economic questions
What to produce
How to produce
How much to produce
For whom to produce

17. Define market economy
Market economy individuals answer the four basic economic questions based upon supply and demand.
What to produce
How to produce
How much to produce
For whom to produce