2.  A system of change and exchange.  Why do we exchange things?  To get things we want/need What are wants/needs? Needs-Things required for survival (Food/clothing/shelter/water) Wants-Things not required, but desired

3.  Some things are easier to get than others  How easy it is to get something is based on “Scarcity”  The more scarce something is, the harder it is to get.  Things can become scarce in two ways  There are not a lot of them  People hold onto their things so that they aren’t available

4.  In order for things to be bought and sold, you need two kinds of people  Producers/suppliers-People who make a product  Consumers/demanders-People who use a product  Producers never make something they think will lose them money  Consumers will never buy something they think will not make them happy

5.  People making something have to decide how much other people want it. That is called the demand.  Based on how many people want something, people will start to make it. That is called supply.  Where supply and demand come together determines price.

7.  Producers offer “Goods” or “Services”  Consumers can buy “Goods” or “Services” A good is a physical thing that can be purchased in an economy (food, a car, a toy, etc.) A Service is an act someone is willing to do for money (car wash, pedicure, shoe shine, etc.)

8.  To produce things, you can use four different resources.  Resources are the building blocks of an economy (things used to make something else)

9.  Land/Natural resources  Labor/Human resources  Capital  Entrepreneurship