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Goal 7 intro

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Economics

Economics

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Transcript

  • 1. Goal 7
    Introduction to Economics
  • 2. What is Economics?
    Economics: the study of how people seek to satisfy their needs and wants by making choices
  • 3. THE FACTORS OFPRODUCTIONGOAL 7: Economics
  • 4. There are 4 Factors of Production:
    Land or Natural Resources
    Capital
    Labor
    Entrepreneurship
  • 5. Land or Natural Resources
    Materials that are NATURALLY MADE and transformed into something else
    Examples:
    Oil
    Timber
    Land
    Crops
    Natural gas
    Milk
  • 6. 2 Types of Natural Resources
    NON-RENEWABLE
    Once used, resource is gone
    Ex: Oil, Natural Gas, Gold
    RENEWABLE
    Can be replaced or renewed or recycled
    ex: wood, water, crops
  • 7. LABOR
    PEOPLE who work to produce a good or service
    Example:
    Construction worker
    Teacher
    Line cook
  • 8. CAPITAL
    MAN MADE instruments that assist in making something else
    Examples:
    Hammer
    Robot
    Book
    Computer
  • 9. Human Capital
    Investment in education or training for a laborer for more productive laborers
  • 10. Entrepreneurs
    People who RISK time and money ($) to start their own business
    Examples:
    Oprah
    Ben & Jerry’s
    Little girl selling Lemonade
    Donald Trump
  • 11. Needs v. Wants
    Need: something people need that is necessary for survival (ex: air, food, shelter)
    Want: an item we desire but that is not essential to survival
  • 12. Three Basic Economic Questions
    What good and services should be produced?
    Should money go to schools or a new city park??
    Howshould these goods and services be produced?
    How much of the product are we going to produce?
    For whom should these goods and services be produced?
    After goods and services have been produced, society must determine how goods and services should be distributed among members of society…use a price system in the US
  • 13. Every CHOICE you make has a…
    Monetary cost: price you paid for a decision ($)
    Trade off: ALL of the alternative choices
    Opportunity cost: the best alternative, your second choice
  • 14. Scenario #1
    Dondrick studied for his exam instead of watching American Idol or doing his laundry.
  • 15. Scenario #2
    Iesha has decided to go to college instead of getting a full-time job or joining the Navy.
  • 16. Scenario #3
    Michael bought a pair of Air Jordans instead of buying his mom a birthday gift or a new jacket for himself.
  • 17. Productivity
  • 18. How does an assembly line increase a company’s profits?
    Divides up the tasks to make a product and allows a worker to specialize in a task to make it faster
    More product = more profit
  • 19. Division of Labor
    Dividing up the tasks required to make a product.
  • 20. Specialization
    Giving a worker a specific task to complete
    Worker becomes a professional in the task
  • 21. Automation
    creating a product with the assistance of machinery
  • 22. Types of Workers
    Blue Collar:
    wage-earning workers who wear work clothes ex: mechanics, miners, maids
    White Collar:
    office and professional workers who do not wear a uniform. Ex: lawyer, teacher, doctor
  • 23. Types of Workers
    Skilled workers:
    Workers who get special training to do their job, earn more for their education
    Ex: mechanic, teacher, doctor
    Unskilled workers:
    workers do not have any special training that allows them to earn more than a basic wage
    Ex: fast food employee, cashier
  • 24. What will happen to a company if they add too many factors of production?
    Law of diminishing returns
    At a certain point adding another factor of production will make a company less productive (lose $)
    Graph
    What do you think this would look like?
  • 25. Law of Diminishing Returns
    The tendency for a continuing effort toward a particular goal to decline in effectiveness after a certain amount of success has been achieved.
  • 26. Supply and Demand
  • 27. How can comparative advantage influence what a company or country produces?
    Comparative advantage: a country, individual, or company can produce a product at a lower cost than a competitor
    Produce products for less money to make a greater profit
  • 28. TYPES OF ECONOMIES
  • 29. 3 Basic Economic Questions
    What to produce?
    How to produce?
    For whom to produce?
  • 30. Traditional Economy
    What is produced?
    Traditional items are produced according to custom
    How is it produced?
    According to custom, no specialization or division of labor
    For whom is it produced?
    For the local people
  • 31. Command / Planned Economy
    What is produced?
    Gov’t decides what they believe to be best for the whole country.
    How is it produced?
    Gov’t owns companies, dictate how to make things. Use specialization and division of labor
    For whom is it produced?
    Produce only what is needed for the country
  • 32. Market Economy
    What is produced?
    Whatever sellers want to produce. Supply and demand are the main factors in decision making
    How is it produced?
    Competition exists. Business is run for profit. Specialization, division of labor used.
    For whom is it produced?
    Produce for whoever will buy in your country and throughout the world
  • 33. Mixed Economy
    Most countries have mixed economies. They combine aspects of the 3 economies to make what is best for them.
    Ex: United States
    mostly market (individuals buy and sell)
    Some command (gov’t rules and restrictions)
    Little traditional (Native American, Amish communities)

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