Chapter 2 Objectives

Transcription

1 Chapter 2 Objectives Define scarcity List the four factors of production. Identify the differences between market and command economies Explain why most countries prefer a mixed economy.

2 Chapter 2 Economic Resources and Systems

3 What is Economics? Chapter 2.1

4 Critical Thinking & Discussion Did a store ever run out of an item you wanted to buy? Did a store ever discontinue an item you liked? What did you do? Why was the store out of the item?

5 Scarcity A shortage of resources. Example: A community not having enough oil, doctors, or technology to satisfy wants and needs.

6 Factors of Production

7 Factors of Production Everything that is necessary to produce a society s goods and services.

8 4 Factors of Production 1. Natural Resources 2. Labor Resources 3. Capital Resources 4. Entrepreneurial Resources

9 1. Natural Resources Raw materials found in nature. Used to produce goods. Examples: Trees -> Paper Fish -> harvested for food

10 Natural Resources (continued) Elements that can be combined to create goods. Countries depend on their natural resources.

11 2 Types of Natural Resources Renewable Can be reproduced Ex: wheat, cattle Nonrenewable Limited Ex: coal, iron, oil

12 2. Labor Resources Knowledge, efforts, and skills people bring to their work. Examples: teachers, coal miners, managers, farmers

13 Labor Resources (continued) Skilled or unskilled Physical or intellectual Labor Unions

14 3. Capital Resources Things used to produce goods and services. Examples: Buildings, materials, equipment, delivery trucks, supermarkets, cash registers, etc.

15 4. Entrepreneurial Resources Meets the changing wants and needs of people. Entrepreneurs recognize the need for new goods and services. Improve resources

16 Chapter 2.2 TYPES OF ECONOMIC SYSTEMS

17 Three Basic Economic Questions What goods or services should be produced? How goods or services should be produced? For whom goods or services should be produced?

18 Economics How society chooses to use resources: produce and distribute goods and services.

19 Business Contribution Inventing products that use available resources

20 Economic System monitors resources Goal: provide people with a minimum standard of living or quality of life 2 types of economic systems: Market Economy Command Economy

21 Create a large ven diagram in your notes half of a page in size. Label one side Market Economy, one side Command Economy, and Both in the middle.

22 Market Economy Economic decisions are made in the marketplace

23 Market Economic System Capitalism Resources are privately owned Own your house, land, business, etc. Government control is minimal In reference to the US, what does the government control? Record in notes

24 Market Economy (continued) The Profit Motive Desire to make more money Businesses constantly competing Owners and producers reap most rewards Fact: CEOs make 500 times avg workers

25 Price, Supply and Demand Price-the amount of money given or asked for when goods or services are bought or sold Supply-is the amount of goods and services that producers will provide at various prices Demand-is the amount or quantity of goods and services that consumers are willing to buy at various prices.

26 Supply and Demand Refer to p.30 Choose a product refer back to p. 29 real world and using your ipad find out the supply and demand correlation for that particular product over the last years. Create a supply and demand chart in your notes.

27 Command Economy Central authority makes key economic decisions.

28 Command Economy Government owns major resources Airlines and steel Makes key economic decisions Individuals may own some businesses

29 Mixed Economy Combination of market and command economies The government takes care of peoples needs, the marketplace takes care of peoples wants.