1. LESSON 1.1 MARKET ECONOMIES
4/23/2017
LESSON 1.1 MARKET ECONOMIES
Compare three types of economies
Describe and explain the characteristics of a market economy

2. Scarcity The conflict between unlimited wants and limited resources.
Scarcity is the most basic problem facing economic systems.
In order to decide how to use its scarce resources, a country must answer 3 economic questions…
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3. 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?
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4. Types of Economic Systems
Traditional Economy
Things are done according to tradition and progress is slow
Developing or third-world countries
Command Economy
The government owns the businesses and controls the economy.
Officials make decisions on what /how goods are produced and how they will be shared.
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5. Types of Economic Systems
Market Economy
Businesses and individuals are free to make their own decisions as they buy and sell in the marketplace (where sellers and buyers do business).
Generally found in countries that have a democratic form of government.
Capitalism,, or free enterprise, means that economic resources are privately owned by individuals rather than by the government.
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6. Characteristics of Market Economies
Private Enterprise
An individual's right to own a business, select a market to enter, and produce with limited government direction.
Yare free to succeed or fail
Private Property
You can own, use, sell, and dispose of things of value or things you create.
Business properties can include land, buildings, tools, and the goods the business produces.
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7. Characteristics of Market Economies
Profit
The amount of money left over from sales after subtracting all of the expenses of operating the business.
The desire to work hard, to be creative, and to satisfy customers in order to earn a profit is called the profit motive.
Profit motive helped market economies outperform the other types of economies.
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8. Characteristics of Market Economies
Competition
The rivalry among businesses to sell their products and services to consumers.
Gives consumers the opportunity to choose from a variety of products and services by comparing the quality, prices, appearance, usefulness, and general appeal of products and services..
Encourages businesses to improve their products, services, and customer satisfaction.
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9. LESSON 1.2 MAKE DECISIONS Explain how an economy meets needs and wants
4/23/2017
LESSON 1.2 MAKE DECISIONS
Explain how an economy meets needs and wants
Describe the six-step decision-making process

10. Needs and Wants Needs are things that are necessary for our survival.
Ex: Food, clothing, housing, etc.
Wants are things that are not necessary for survival, but add comfort and pleasure to our lives.
Ex: Blueray disc player, Xbox 360, Nike shoes, etc.
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11. Goods and Services Goods are things you can see and touch.
Ex: Cell phones, I-Pods, Sporting Equipment, etc.
Goods are generally referred to as products.
Services satisfy needs and wants through the efforts of people or equipment.
Ex: Vehicle repair, cable company, hair stylist, etc.
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12. Economic Resources
The means through which goods and services are produced.
Also referred to as factors of production.
3 types…
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13. Economic Resources Natural Resources Human Resources (Labor)
The raw materials supplied by nature.
Come from the earth, water, or air.
Human Resources (Labor)
The people who work to produce goods and services.
Capital Resources
The tools, equipment, supplies, and buildings that are used to supply goods and service.
Capital is used to start, operate, or expand a business.
Money is a type of Capital.
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14. Economic Decision Making
The process of deciding among several alternative wants the one that you most desire.
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15. The Decision-Making Process
GOOD
DECISION
6. Review Your Decision
5. Act on Your Choice
4. Choose One
3. Evaluate Choices
2. Identify Choices
1. Define Problem
PROBLEM
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16. LESSON 1.3 HEALTHY ECONOMIES
4/23/2017
LESSON 1.3 HEALTHY ECONOMIES
Discuss three measurements of an economy's health
Name and describe the four phases of a business cycle

17. Economic Measurements
Gross domestic product (GDP)
The total dollar value of all goods and services produced in a country in one year.
Includes three major categories
What consumer spend for food, clothing, and housing.
What businesses spend for buildings, equipment, and supplies.
What government agencies spend to pay employees and buy supplies.
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18. Gross Domestic Product
Base year – prices in any year are compared with this year.
Constant Dollar (real GDP) – dollar amount when the effect of price increases is taken out.
GDP Per Capita – the total GDP divided by the total population.
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19. Economic Measurements
Labor productivity
The number of item produced per worker.
Productivity = Number of units produced (output)
Number of hours worked (input)
Ex: Productivity = 10,000 units = 125
80 hours
Worker Productivity – the productivity of one worker.
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20. Economic Measurements
Inflation
A sustained increase in the general level of prices for goods and services.
Deflation
A sustained decrease in the general level of prices.
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21. The Business Cycle Prosperity Recession
The phase where most people who want to work are employed and businesses produce goods and services in record numbers.
Recession
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.
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22. The Business Cycle Depression Recovery
A phase of the business cycle marked by a prolonged period of unemployment, weak sales of goods and services, and business failures.
Recovery
The phase in which unemployment begins to decrease, demand for goods and services begins to increase, and GDP begins to rise again.
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23. LESSON 1.4 PARTICIPATE IN AN ECONOMY
4/23/2017
LESSON 1.4 PARTICIPATE IN AN ECONOMY
Define three economic roles performed by people in an economy
Discuss standard of living and quality of life

24. Economic Roles Consumer Worker Citizen
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25. Demand and Supply
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 relationship between the amount of a good or service that businesses are willing and able to provide and the price of the good or service.
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26. 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.
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