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How we get what we want... Chapter 5 AgriScience Explorations 2nd Ed 8th grade semester class, Spring 2001 Lincoln Middle School
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Objectives 4 Define economics and explain economic systems 4 Describe free enterprise 4 List and explain 3 ways of doing business 4 Explain entrepreneurship
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Questions you need to answer? Headings and subheadings 4 What is economics? 4 Define and describe supply and demand? 4 How does price effect economics? 4 What importance does money play in economics? 4 Explain the economic system? 4 Explain free enterprise? 4 Describe business ownership?
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Questioning con’t 4 What choices are available in a free enterprise system? 4 What kind of control issues are present in free enterprise? 4 List 3 ways of doing business? 4 Describe sole proprietorship? 4 Describe partnerships? 4 What is a corporation?
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Questioning con’t 4 How do consumers affect competition? 4 Who are consumers? 4 Define Entrepreneurship?
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Terms 4 business 4 competition 4 consumer 4 cooperative 4 corporation 4 demand 4 dividend 4 economic system 4 economics 4 entrepreneurship 4 free enterprise 4 money 4 monopoly 4 partnership 4 price 4 private ownership 4 property 4 risk 4 sole proprietorship 4 supply
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What is economics? 4 The study of how people get what they want 4 Includes producing goods and services and getting them to people 4 Money and resources are scarce 4 Governments have systems to care for people 4 Work is required to produce and make money 4 Includes supply, demand, prices & money
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Define and describe supply & demand 4 Prices vary with supply of something as related to demand for it 4 Supply and demand work together in setting price 4 Both are limited 4 supply , demand 4 supply ,. demand
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Supply versus Demand 4 Supply –amount of something that is available –can be reduced by disasters –Supply , Price 4 Demand –amount of something that will be bought at a given price –Price Demand –price must cover costs of production
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Graph plotting supply, demand, price 4 Price Demand Supply 4 Price Demand Supply
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How does price effect economics? 4 Price is the amount of money involved in buying and selling a good or service –worth of the item in money
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What importance does money play in economics? 4 Money is anything exchanged for goods or services –currency is money used in a country –the value of money is how much it will buy –change in prices can cause change in the value of money
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The value of money 4 $1 = $.43 (2000) 4 $1 = $20 (1930s- 40s) 4 $1 week wages = 40 hours+ 1930 4 Car $3600 4 House $10,000
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Explain the economic system? 4 Economic system is how people go about going business – how things are created, owned or exchanged 4 All countries have economic systems just modified in some way to meet their particular needs – capitalism versus communism –major differences are based on property ownership and control
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Explain free enterprise? 4 Free enterprise the a way of doing business in the United States –allows for business to work with minimum governmental control –allows people to work and make money for themselves –many people own property
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Describe property ownership? 4 Private ownership is having things people can call their own 4 Property is anything with value 4 Types of property –real is land and its natural features –personal is items people personally use
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Describe business ownership? 4 A business is a person or group that produces and / or sells goods and services 4 People who own businesses take risks –a risk is the possibility of losing what has been invested –but you also can get benefits from a risk you can make money
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What choices are available within free enterprise? 4 You can chose what to produce, but and sell 4 You can set your price and be somewhat flexible 4 Decisions require a lot of information
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What kind of control issues are present in free enterprise? 4 Few government controls 4 You can run the business as you chose - but dishonesty is unacceptable 4 Standards are imposed –help keep food clean and measured –people want a full portion of what they pay for
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List 3 ways of doing business? 4 Sole proprietorship 4 Partnership 4 Corporations
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Describe sole proprietorship? 4 Business owned by 1 person –responsible for all areas of operations hire, fire, buy, sell, supervise, submit government forms and all other work –must have all the money to start the business
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Describe partnerships? 4 Co-owners, business owned by 2 or more people 4 profits and losses are split equally between all members
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What is a corporation? 4 Association of members doing business 4 Chartered by a state government 4 People who buy stock are called stakeholders or stockholders and elect a Board of Directors to run the corporation –and are paid dividends (part of the profit) 4 Cooperatives provide members with services - marketing coops help market farm products
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How do consumers effect competition? 4 Businesses must have customers to but goods and services
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Who are consumers? 4 Determine what business produce –if consumers won’t but a product it won’t be produced 4 A consumer is a person, business or agency that uses goods and services –all consumers have limited money and must decide how it will be spent
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What is competition? 4 Consumers will choose what they like best compared with it’s cost 4 Competition allows consumers to choose between similar products 4 Monopoly exists if one producer controls products and / or products – not good in free enterprise systems 4 Advertising influences what people will buy –never use untruthful advertising
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Define entrepreneurship? 4 Creating goods or services to meet a unique need –“new” things 4 An Entrepreneur is a person who takes risks, in creating and developing new products and ways to market them –must be a very creative person with creative ides
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Answer the following questions to test your knowledge 4 What is economics? 4 How does supply / demand relate to the prices consumers pay? 4 What is currency? Name the currency in 3 countries? 4 Why is creating goods and services a goal for any nation? 4 What is the difference between real and personal property?
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Test your knowledge con’t 4 What are the ways f doing business? and explain each 4 Who are consumers and why do they play a valuable role? 4 What is the difference between competition and a monopoly? 4 What is entrepreneurship?
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Match the answers to the correct statement on the next slide 4 A. economics 4 B. supply 4 C. demand 4 D. price 4 E. money 4 F. free enterprise 4 G. risk 4 H. partnership 4 I. dividend 4 J. cooperative
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Match pervious words to this slide 4 Profit paid to a stockholder in a corporation 4 Study of how people get what they want 4 Amount of product that will be sold at a given price 4 Anything exchanged for goods and services 4 Amount of money used in buying or selling a good or service
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Matching con’t 4 Amount of goods or services available 4 A business owned by 2 or more individuals 4 Freedom to do business with a minimum of government control 4 The possibility of losing something
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Chapter 5 test 4 1.What is economics? 4 2.Define and describe supply and demand? 4 3.How does price affect economics? 4 4.What importance does money play in economics? 4 5.Explain an economic system? 4 6.Explain free enterprise? 4 7.What is the difference between property and business ownership? 4 8.List 3 ways of doing business and explain all 3? 4 9.Who are consumers and what is their role? 4 10. Entrepreneurship important, why?
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