Needs Food Shelter Clean Air Water Clothing Wants Jewelry Big House New Shoes Movies Chapter 1 Economic Decisions and Systems Section 1.1 - Satisfying Needs and Wants 1
things that are required in order live vs things that add comfort and pleasure to life Examples: Conventional: food water clean air clothing shelter Modern: good education employment safety transportation medical care medicines 2
Examples: things that you can see and touch vs activities that are consumed at the same time they are produced 3
the means through which goods and services are produced 1. Natural Resources 2. Human Resources 3. C apitalresources Label your food's resources with N, H, & C. raw materials supplied by nature Examples: Rivers, lakes, oceans, etc. Chickens 4
people producing goods and services Examples: Farmers Factory Workers Entrepreneur products and money used in the production of goods and services Examples: buildings equipment money 5
Chapter 1 Economic Decisions and Systems Section 1.2 - Economic Choices caused by mismatch of unlimited needs and wants and limited resources results from scarcity not having enough resources to satisfy every need Example: > If you spend your $75 paycheck on new shoes, you might not have enough for pizza and a movie this weekend. 6
Process of choosing which wants, among several options, will be satisfied. 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. giving up something to have something else value of the next-best option that you didn't choose 7
Chapter 1 Economic Decisions and Systems Section 1.3 - Economic Systems Types of Economic Systems Economic System a nation's plan for taking care of its basic economic needs type of system depends on how much the government is involved in the marketplace 8
Types of Economic Systems 1) Command Economy economic resources are owned and controlled by the government personal economic freedom is limited Types of Economic Systems 2) Market Economy economic resources are owned and controlled by the people of the country economic needs are determined through the marketplace 9
Types of Economic Systems 3) Traditional Economy system used in less developed countries goods and services are produced based on tradition - the way things have always been done focus is on meeting basic needs: food, clothing, and shelter Types of Economic Systems 4) Mixed Economy combination of the command and market economies a market economies with varying degrees of government involvement in the marketplace 10
Three Economic Questions 1. What goods and services will be produced? 2. How will the goods and services be produced? 3. What needs and wants will be satisfied with the goods and services produced? Three Economic Questions 1. What to Produce? determined by country's natural resources all countries vary on values (education vs. manufacturing, etc) 11
Three Economic Questions 2. How to produce? determine what best suits a country's circumstances depending on resources, a country relies on skilled vs. unskilled workers; advanced or simple technology; own resources or outside resources Three Economic Questions 3. What needs and wants to satisfy? country must determine most critical goods and services to produce countries focus on varying persons to benefit from decisions > persons with political/monetary power > those required by the government 12
The U.S. Economic System Grab a textbook and return to your seat... Take notes on the "U.S. Economic System" (pages 21-22). Sections: U.S. Economic System Private Property Freedom of Choice Profit Competition Chapter 1 Economic Decisions and Systems Section 1.4 - Supply and Demand 13
PARTNER WORK! Sort each of the descriptions into two categories: Consumers Producers (there will be five descriptions under each category) When finished... check your work using page 23 write this information into your notes CONSUMERS SET DEMAND the quantity of a good or service that consumers are willing and able to buy Where would you rather eat? A new restaurant with slow service, poor food quality, and high noise levels. OR A new restaurant with terrific food and fast and friendly service. 14
PRODUCERS ESTABLISH SUPPLY the quantity of a good or service that businesses are willing and able to provide Which would you rather sell? A popular product that consumers are willing to pay a high price for. OR A product with heavy competition that consumers will only pay low prices for. A GRAPHIC VIEW 15
FACTORS INFLUENCING SUPPLY AND DEMAND Example Demand Supply Price Phoenix hotels in winter Phoenix hotels in summer Common product with a great deal of competition Unique product with little competition Competitors - businesses offering very similar products to the same customers A GRAPHIC VIEW Market Price - the point where supply and demand are equal 16