1. Goals Explain the difference between needs and wants Distinguish between goods and services Describe the types of economic resources Essential Question – what are economic resources?

2. The Main Idea Businesses make money by offering goods and services to satisfy the wants and needs of consumers and other businesses. In this way, wants and needs drive the U.S. economy.

3. Which of these things do you want? Which do you need? Graphic Organizer Suppose you had $10. You could buy lunch or go to a movie. Lunch Movie Need Want

4. An Abundance of Wants and Needs Wants and needs determine what products and services businesses provide. Needs Things that are required in order to live wants Things that add comfort and pleasure to your life

5. Needs and Wants Our needs and wants = Unfortunately, they never end! (infinite)

6. How do you satisfy your needs and wants? Buying Goods and Services

7. The U.S. Economy – some facts pg. 7 Guess who is the largest producer of goods and services in the world? –Yep, the U.S.! Guess who consumes more than any other country? –Yep, the U.S.!

8. The U.S. Economy – some facts pg. 8 Guess who has twice as many shopping malls as they do high schools? –Yep, the U.S.! Guess who produces more pounds of garbage per person per year? –Yep, the U.S.!

9. Satisfying Wants and Needs Businesses provide goods and services to satisfy the wants and needs of businesses and consumers. goods Things that you can see and touch - tangible services Are activities that are consumed at the same time they are produced – intangible

10. How Resources Limit the Ability to Satisfy Wants and Needs No one has enough resources to satisfy all of their wants. Economic resources Are the means through which goods and services are produced.

11. Three types of economic resources Economic resources are called factors of production. The 3 kinds of economic resources are: Natural resources Human resources Capital resources

12. 1. Natural Resources Raw materials supplied by nature

13. 2. Human Resources People producing goods and services

14. 3. Capital Resources People must have access to tools and equipment in order to convert natural resources into products. Capital resources include buildings, equipment, supplies, and knowledge Also include $$$$$$ –Build a factory, buy a truck, pay employees

15. Factors of Production and SpaghettiOs Natural Human Capital

16. Make the Most of Your Resources Because Our Resources are Limited You can make the most of your resources by making careful decisions about what to buy.

17. You work as an event planner for a local company. You are in charge of hiring a caterer for the company’s 10th anniversary celebration. You have bids from four caterers in town. One of the bids is from a caterer who is an old friend. His bid is higher than the three others. Decision Making Would your relationship with the caterer affect which company you would hire? Explain your answer.

18. Answer The event planner should recluse himself or herself from the decision-making process due to the conflict of interest. The employee has an ethical obligation to act in the best interests of the company.

19. ???? How could a resource be used for one product result in a limited supply for another? Give examples

20. 1.Describe the differences between a good and a service. Which is tangible and which is intangible? A good is a product that is tangible, or can be touched. A service is something that is offered for our benefit. It isintangible.

21. 2.Define resources. Resources are items people use to make or obtain what they need or want. Examples of resources include money, fuel, and labor.

22. Chapter 1.2. Page 12. OBJECTIVES: Understand the basic economic problem Explain the steps in the decision-making process Essential Question: How do we use the decision making process in our daily activities?

23. The Basic Economic Problem Individuals and businesses have unlimited wants and needs….this leads to a problem Scarcity Not having enough resources to satisfy every need

24. The Basic Economic Problem You earn $75 a week at a part time job. Do you spend it all on a new pair of kicks or save it so you have money for movie and pizza on Saturday Economic decision- making The process of choosing which wants, among several options, will be satisfied.

25. Tradeoffs and Opportunity Costs Seeing that we must make choices all the time, we are making tradeoffs…we have to give up something in order to get something.

26. Tradeoffs and Opportunity Costs You didn’t buy the new pair of shoes so you could go to the movies and get pizza. What is the tradeoff? Not buying the shoes so you could have pizza/movie tradeoff When you give up something to have something else

27. Tradeoffs and Opportunity Costs Economists evaluate an alternative by considering the opportunity cost of a decision The enjoyment of owning the shoes was the opportunity cost Opportunity costs Is the value of the next- best alternative that you did not choose

28. Opportunity Cost The benefit you get from your choice should be greater than the benefit from the next- best choice that you didn’t choose. We as humans always try to make the best choice to benefit ourselves, naturally.

29. Opportunity Cost example A person decides to quit his or her job and go back to school to increase their future earning potential. What is the opp cost? A person decides to remain employed and not return to school to get a college degree. What is the opp cost?

30. Opportunity Cost example If a city decides to build a hospital on vacant land it owns, what is the opp cost? Answer - the opportunity cost is the value of the benefits forgone of the next best thing that might have been done with the land and construction funds instead

31. Class assignment On a piece of paper, name at the top, list TEN situations where there is an opportunity cost present Explain to me what the opportunity cost is in each situation. Example – I chose to stay late at school and miss the chance to ride bikes with my son. The opportunity cost is me having fun with my son.

32. Choices…we’ve all made bad ones:

33. The Decision-Making Process Step 1 Step 2 Step 3 Step 4 Step 5 Act on your choice. Define the problem. Identify the choices. Evaluate the advantages and disadvantages of each. Choose one. Figure 1.1 Step 6- Review Your decision

34. 1. What is scarcity? It is when you don’t have enough resources to satisfy all of your needs

35. 2. When you give up something to have something else, you a making a _______? Tradeoff

36. 3.List the steps in the decision-making process. Define the problem, Identify the choices, Evaluate the advantages and disadvantages of each choice, Choose one, Act on your choice, Review your decision.

37. 4. Which country is the largest producer of goods and services? USA