Basics of Our Economy<br />What is the driving motivation of American consumers & producers?<br />
Key Vocabulary<br />Consumers: those who need/want goods and services produced by producers.<br />Producers: those who pro...
Limited Resources<br />How does Scarcity influence….<br />Consumer Choices?<br />Prices of Goods?<br />Supply of Goods?<br...
Types of  Costs<br />Fixed Costs:<br />The costs that remain basically constant no matter amount of goods sold.<br />Examp...
Types of Revenue<br />Marginal Revenue (AKA Marginal Benefit):<br />The revenue or benefit of producing one additional uni...
Diminishing Marginal Benefit (Return)<br />
Key Vocabulary<br />Economic Interdependence<br />Factor Market<br />Product Market<br />Gross Domestic Product (GDP)<br /...
How do we Measure our Economy?<br />GDP (Gross Domestic Product):<br />Total Value of all finished goods and services prod...
Circular Flow Model<br />
Circular Flow Model<br />How many sectors, or parts, does our economy have?  What are they?<br />Why is it called the “Cir...
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Micro economicsbasics of_our_economyweek2

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Micro economicsbasics of_our_economyweek2

  1. 1. Basics of Our Economy<br />What is the driving motivation of American consumers & producers?<br />
  2. 2. Key Vocabulary<br />Consumers: those who need/want goods and services produced by producers.<br />Producers: those who produce what consumers need/want.<br />Supply: the amount of a good/service producers make available to consumers<br />Demand: the amount of a good/service consumers want.<br />
  3. 3. Limited Resources<br />How does Scarcity influence….<br />Consumer Choices?<br />Prices of Goods?<br />Supply of Goods?<br />Demand of Goods?<br />
  4. 4. Types of Costs<br />Fixed Costs:<br />The costs that remain basically constant no matter amount of goods sold.<br />Examples?<br />Variable Costs:<br />The costs that change regularly depending on amount of goods sold.<br />Examples?<br />Total Costs: Fixed + Variable Costs<br />Marginal Costs:<br />The cost of producing one additional unit of a good/service.<br />
  5. 5. Types of Revenue<br />Marginal Revenue (AKA Marginal Benefit):<br />The revenue or benefit of producing one additional unit of a good/service.<br />How do producers make decisions?<br />Cost-Benefit Analysis:<br />Comparing the cost and benefit of a decision. (Benefit should outweigh Cost)<br />Diminishing Return (AKA Diminishing Marginal Benefit)<br />The revenue or benefit of each additional unit goes down.<br />
  6. 6. Diminishing Marginal Benefit (Return)<br />
  7. 7. Key Vocabulary<br />Economic Interdependence<br />Factor Market<br />Product Market<br />Gross Domestic Product (GDP)<br />Standard of Living<br />How does everyone in <br />our economy depend<br /> on each other?<br />
  8. 8. How do we Measure our Economy?<br />GDP (Gross Domestic Product):<br />Total Value of all finished goods and services produced in a country. <br />Standard of Living<br />Quality of life based on necessities and luxuries.<br />
  9. 9. Circular Flow Model<br />
  10. 10. Circular Flow Model<br />How many sectors, or parts, does our economy have? What are they?<br />Why is it called the “Circular Flow” model?<br />What is something important that flows from Businesses to Households?<br />…from Households to Businesses?<br />…from Businesses & Households to the Government?<br />…from Government to Businesses & Households?<br />

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