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Econ123by smk


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  • 1. Study Guide: Social Studies Test on2/03/2012
  • 2. Chapter 1:Economics inthis world
  • 3. Economics: What is it? Economics is about producing and consuming goods and services Also about buying these goods and services Making choices If you buy food, that is involved in economics; if you go to the doctor, that is involved in economics as well Economics is a part of almost everything that you do.
  • 4. Goods and Services Goods- Products; things you can touch and use Services- Things people do for someone else Example: You bought gas at the gas station Gas- a good Gas station attendants serving oil- a service
  • 5. Examples of goods and servicesGoods Services Goods Computers Services  Check-up from doctor Bicycles  Waiter serving food Apples  Musicians Books  Teachers Dolls  Clerks Jackets  Truck drivers to carry Telephones your mail Socks  People who take your Shoes money at the resister  Etc. Etc.
  • 6. Economic ChoicesA basic economic question is, “ How will we use our scarce resources to satisfy our needs and wants?” This is a question that a lot of groups and individuals use everyday.
  • 7. (Physical)Needs (Physical) needs- things that are necessary for life. These are some basic physical needs for people: Air, water, iPods, food, clothing, TVs, shelter, and heat All of these are necessary. The crossed out ones are not. This is why iPods and TVs are not needs; they are wants. Not permanently satisfied
  • 8. Psychological Wants Wants are NOT necessary for life. They are things that people want to make them happy. Every person has different wants. Wants are based on where and when people live. Ex) iPads were not people’s wants in the 1910s. Now they are. Ice cream, pair of boots, dolls, etc. Not permanently satisfied
  • 9. Resources Resources- what people use to make the things to satisfy their needs and wants. These are the three basic types of resources: Natural Resources- things found in nature People- Made Resources- things made by people and used to make more Human Resources- labor
  • 10. Examples of ResourcesNatural People-Made HumanResources Resources Resources Air  Tools • Ideas • Work that people Water  Factories do • Energy Plants  Machineries • Training Minerals  computers Animals
  • 11. Scarcity Scarcity- when there is a gap between needs and wants on one hand and available resources, goods, services on the other hand. Scarcity exists when needs or wants are greater than available resources, goods, or services.
  • 12. Chapter 2:Foureconomicquestions
  • 13. The four basic economicquestions 1.What…? 2.How…? 3.How many/How much…? 4.Who…?
  • 14. 1. What…? Thistype of question deals with what outputs will be produced or consumed Examples: -What will the farmer grow? -What will the factories make? -What will the tax money be spent for?
  • 15. 2. How…? Thistype of question deals with how outputs are produced and how resources are used. Examples: -How will the factories make a table? -How will the farmer grow apples? -How will they make clothes?
  • 16. 3. How Much/How Many…? Thistype of question deals with how much or how many resources will be used. It also deals with how fast resources will be used up. Examples: -How many trees will be cut? For howlong can we use them? -How many tables will be made?
  • 17. 4. Who…? This type of question deals with the distribution of output. These questions are affected by the costs of goods and services. Examples: -Who will make the desks? -Who will be the gas-stationattendant?
  • 18. Alternative Cost Alternative Costs- what is given up when a scarce resource is used in a certain way. Example: You wanted to get 2 video games. However, you only had the money to get one. You decide to get the 1st game. The other video game is an alternative cost.
  • 19. Economic Conflict Economic conflicts are based on values, beliefs, and opinions. The decision depends on who makes the decision. Example: Workers want to get more money for their work but their bosses doesn’t wants to.
  • 20. Ways to settle EconomicConflictsThese are two ways that an economicconflict can be settled:• Market Bargaining• Government Actions
  • 21. Chapter 2:EconomicSystems
  • 22. Economic System Economic Systems- a way of making economic choices and decisions. Three basic types of economic systems: -Traditional Economies -Command Economies -Market Economies
  • 23. Traditional EconomiesIn a traditional economy, economicdecisions are based on tradition andcustom. Children learn skills from their parents. The same goods and services are produced generation after generation.
  • 24. Advantages andDisadvantages of a TraditionalEconomyAdvantages: It is very stable. People know what to expect. No one is left out.Disadvantages: Individuals don’t have much choice of what they do. Changes come very slowly.
  • 25. Command EconomiesCommand Economies- Economies in whicha central authority makes all of thedecisions.Central authority:☀ A king, dictator, powerful politician party, etc.
  • 26. Advantages of CommandEconomiesAdvantages: Changes in what and how things are produced. It is also produced fairly quickly. The needs of the entire country can be considered by the central authority.
  • 27. Disadvantages of CommandEconomies Individuals are not encouraged to make new ideas. Individuals do not see why they should work hard. Individuals do not always get their needs and wants. Power is kept by very few people- who often abuses the power for their benefit.
  • 28. Market EconomiesMarket economies-the result of millions ofbuying and selling decisions made bymillions of individuals. The U.S. economy is basically a market economy.
  • 29. Advantages of MarketEconomies A lot of people are involved in making economical decisions. Individuals can work on whatever they want to and are encouraged to develop new ideas. Producers can produce whatever they wish. The economy is flexible. Consumers are free to buy the goods and services they choose.
  • 30. Disadvantages of MarketEconomies Individuals have no way of meeting their needs. There is no guarantee that individuals will succeed in their work. The needs of society as a whole is overlooked; often not the needs of a individual. The economy goes through ups and downs called business cycles.
  • 31. Bibliography Our Economic SystemBy: Clairece Fegin Mr. Schiff