1. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 1 1-1 1-1Satisfying Needs and Wants 1-2 1-2Economic Choices 1-3 1-3Economic Systems 1-4 1-4Supply and Demand 1 C H A P T E R Economic Decisions and Systems

2. © 2012 Cengage Learning. All Rights Reserved. SLIDE 2 1-1Satisfying Needs and Wants Goal 1Explain the difference between needs and wants. Goal 2Distinguish between goods and services. Goal 3Describe the types of economic resources.

3. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 3 KEY TERMS ●needs ●wants ●goods ●services ●economic resources

4. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 4 NEEDS AND WANTS ●Needs are essential ●Wants add to the quality of life ●Needs and wants are unlimited

5. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 5 Checkpoint ●What is the difference between a need and a want? ●Needs are those things required to live, such as food, clothing, and shelter. ●Wants are things that add comfort and pleasure to our lives such as television, music CDs, and movies.

6. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 6 GOODS AND SERVICES ●Goods and services for businesses and consumers ●The U.S. economy

7. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 7 Checkpoint ●How do people satisfy their wants and needs? ●People satisfy their wants and needs by purchasing and consuming goods and services.

8. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 8 ECONOMIC RESOURCES ●Natural resources ●Human resources ●Capital resources ●Resources are limited

9. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 9 Checkpoint ●What are the three types of economic resources? Give an example of each type. ●Natural: water, land, trees, animals, and minerals. ●Human: labor (people who run farms and factories, transport goods, provide services, or manage businesses). ●Capital: money, land, buildings, tools, and equipment.

10. © 2012 Cengage Learning. All Rights Reserved. SLIDE 10 1-2Economic Choices Goal 1Understand the basic economic problem. Goal 2Explain the steps in the decision- making process.

11. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 11 KEY TERMS ●scarcity ●economic decision-making ●trade-off ●opportunity cost

12. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 12 THE BASIC ECONOMIC PROBLEM ●Choices ●Trade-offs and opportunity costs

13. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 13 Checkpoint ●What is opportunity cost? ●Opportunity cost is the value of the next best alternative that you don’t choose. ●It is what you are willing to give up in order to have your first choice.

14. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 14 THE DECISION-MAKING PROCESS 1.Define the problem. 2.Identify the choices. 3.Evaluate the advantages and disadvantages of each choice. 4.Choose one. 5.Act on your choice. 6.Review your decision.

15. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 15 Checkpoint ●What are the six steps in the decision-making process? ●Define the problem. ●Identify the choices. ●Evaluate advantages and disadvantages of each alternative. ●Choose one. ●Act on your choice. ●Review your decision.

16. © 2012 Cengage Learning. All Rights Reserved. SLIDE 16 1-3Economic Systems Goal 1Identify the three economic questions. Goal 2Differentiate among the main types of economic systems. Goal 3Describe the economic system of the United States.

17. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 17 KEY TERMS ●economic system ●command economy ●market economy ●traditional economy ●mixed economy ●capitalism

18. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 18 THE THREE ECONOMIC QUESTIONS ●What to produce? ●How to produce? ●What needs and wants to satisfy?

19. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 19 Checkpoint ●What are the three economic questions? ●What goods and services will be produced? ●How will the goods and services be produced? ●What needs and wants will be satisfied with the goods and services?

20. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 20 TYPES OF ECONOMIC SYSTEMS ●Command economy ●Market economy ●Traditional economy ●Mixed economies

21. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 21 Checkpoint ●What are the main differences among the three economic systems? ●The main differences among the economic systems are found in the ways in which the three economic questions are answered.

22. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 22 THE U.S. ECONOMIC SYSTEM ●Private property ●Freedom of choice ●Profit ●Competition

23. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 23 Checkpoint ●Name the four principles of the U.S. economic system. ●Private property ●Freedom of choice ●Profit ●Competition

24. © 2012 Cengage Learning. All Rights Reserved. SLIDE 24 1-4Supply and Demand Goal 1Describe supply and demand orally and with graphs. Goal 2Discuss how supply and demand affect prices of products and services.

25. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 25 KEY TERMS ●consumer ●producers ●demand ●supply ●market price

26. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 26 PARTICIPATING IN A MARKET ECONOMY ●Consumers set demand ●Producers establish supply ●A graphic view

27. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 27 DEMAND AND SUPPLY

28. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 28 Checkpoint ●How does the price of a product affect demand and supply? ●As prices decrease, the number of consumers willing and able to purchase the product (demand) will increase. ●As prices increase, businesses will be willing to supply larger quantities of the product.

29. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 29 DETERMINING PRICE ●Factors influencing demand ●Factors influencing supply ●Determining market price

30. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 30 MARKET PRICE

31. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 31 Checkpoint ●How is the market price for a product determined? ●Supply, demand, and competition determine the market price for a product or service. ●The market price is the point at which supply and demand are equal.