Economics Principles
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Economics Principles

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Economics Principles Economics Principles Presentation Transcript

  • Economic Principles From: foukeffa.org GA Ag Ed Curriculum Office To accompany the Georgia Agriculture Education Curriculum Lesson 03452-8 July 2002
  • Objectives
    • Define economics and explain economic systems
    • Describe free enterprise
    • List and explain 3 ways of doing business
    • Explain entrepreneurship
  • Questions: Headings and Subheadings
    • What is economics?
    • Define and describe supply and demand.
    • How does price effect economics?
    • What importance does money play in economics?
    • Explain the economic system.
    • Explain free enterprise.
    • Describe business ownership.
  • Questions cont
    • What choices are available in a free enterprise system?
    • What kind of control issues are present in free enterprise?
    • List 3 ways of doing business.
    • Describe sole proprietorship.
    • Describe partnerships.
    • What is a corporation?
  • Questions cont
    • How do consumers affect competition?
    • Who are consumers?
    • Define Entrepreneurship?
  • Terms
    • business
    • competition
    • consumer
    • cooperative
    • corporation
    • demand
    • dividend
    • economic system
    • economics
    • entrepreneurship
    • free enterprise
    • money
    • monopoly
    • partnership
    • price
    • private ownership
    • property
    • risk
    • sole proprietorship
    • supply
  • What is Economics?
    • The study of how people get what they want
    • Includes producing goods and services and getting them to people
    • Money and resources are scarce
    • Governments have systems to care for people
    • Work is required to produce and make money
    • Includes supply, demand, prices & money
  • Supply & Demand
    • Prices vary with supply of something as related to demand for it
    • Supply and demand work together in setting price
    • Both are limited
    • supply  , demand 
    • supply  , demand 
  • Supply versus Demand
    • Supply
      • Amount of something that is available
      • Can be reduced by disasters
      • Supply  , Price 
    • Demand
      • Amount of something that will be bought at a given price
      • Price  , Demand 
      • Price must cover costs of production
  • Graph Plotting
    • Price  , Demand  , Supply 
    • Price  , Demand  , Supply 
  • How Price Affects Economics
    • Price is the amount of money involved in buying and selling a good or service
      • Worth of the item in money
  • Money’s Importance in Economics
    • Money is anything exchanged for goods or services
      • Currency is money used in a country
      • The value of money is how much it will buy
      • Change in prices can cause change in the value of money
  • The value of money
    • $1 = $.43 (2000)
    • $1 = $20 (1930s- 40s)
    • $1 week wages = 40 hours+ 1930
    • Car $3600
    • House $10,000
  • The Economic System
    • Economic system is how people go about doing business
      • How things are created, owned, or exchanged
    • All countries have economic systems just modified in some way to meet their particular needs
      • Capitalism versus communism
      • Major differences are based on property ownership and control
  • Free Enterprise
    • Free enterprise the way of doing business in the United States
      • Allows for business to work with minimum governmental control
      • Allows people to work and make money for themselves
      • Many people own property
  • Property Ownership
    • Private ownership is having things people can call their own
    • Property is anything with value
    • Types of property
      • Real is land and its natural features
      • Personal are items people personally use
  • Business Ownership
    • A business is a person or group that produces and/or sells goods and services
    • People who own businesses take risks
      • A risk is the possibility of losing what has been invested
      • You also can benefit from a risk by making money
  • Available Choices Within Free Enterprise
    • You can choose what to produce, buy, and sell
    • You can set your price and be somewhat flexible
    • Decisions require a lot of information
  • Control Issues Present in Free Enterprise
    • Few government controls
    • You can run the business as you chose, but dishonesty is unacceptable
    • Standards are imposed
      • Help keep food clean and measured
      • People want a full portion of what they pay for
  • 3 Types Businesses
    • Sole proprietorship
    • Partnership
    • Corporations
  • Sole Proprietorship
    • Business owned by 1 person
      • Responsible for all areas of operations
        • hire, fire, buy, sell, supervise, submit government forms and all other work
      • Must have all the money to start the business
  • Partnerships
    • Co-owners
      • Business owned by 2 or more people
    • Profits and losses are split equally between all members
  • Corporation
    • Association of members doing business
    • Chartered by a state government
    • People who buy stock are called stakeholders or stockholders and elect a Board of Directors to run the corporation
      • Paid dividends (part of the profit)
    • Cooperatives provide members with services - marketing co-ops help market farm products
  • How Consumers Affect Competition
    • Businesses must have customers to buy goods and services
  • Consumers
    • Determine what type of business
      • If consumers won’t buy a product, it won’t be produced
    • A consumer is a person, business, or agency that uses goods and services
      • All consumers have limited money and must decide how it will be spent
  • Competition
    • Consumers will choose what they like best compared with its cost
    • Competition allows consumers to choose between similar products
    • Monopoly exists if one producer controls products
      • Not good in free enterprise systems
    • Advertising influences what people will buy
      • Never use untruthful advertising
  • Entrepreneurship
    • Creating goods or services to meet a unique need
      • “New” things
    • An Entrepreneur is a person who takes risks in creating and developing new products and ways to market them
      • Must be a very creative person with creative ideas
  • Test Your Knowledge
    • What is economics?
    • How does supply/demand relate to the prices consumers pay?
    • What is currency? Name the currency in 3 countries?
    • Why is creating goods and services a goal for any nation?
    • What is the difference between real and personal property?
  • Test Your Knowledge con’t
    • What are the ways of doing business? Explain each.
    • Who are consumers and why do they play a valuable role?
    • What is the difference between competition and a monopoly?
    • What is entrepreneurship?
  • Match Answers to Correct Statement
    • Profit paid to a stockholder in a corporation
    • Study of how people get what they want
    • Amount of product that will be sold at a given price
    • Anything exchanged for goods and services
    • Amount of money used in buying or selling a good or service
    • Amount of goods or services available
    • A business owned by 2 or more individuals
    • Freedom to do business with a minimum of government control
    • The possibility of losing something
    Economics Supply Demand Money Price Free Enterprise Risk Partnership Dividend Cooperative
  • Chapter 5 test
    • 1.What is economics?
    • 2.Define and describe supply and demand.
    • 3.How does price affect economics?
    • 4.What importance does money play in economics?
    • 5.Explain an economic system.
    • 6.Explain free enterprise.
    • 7.What is the difference between property and business ownership?
    • 8.List 3 ways of doing business and explain all 3.
    • 9.Who are consumers and what is their role?
    • 10. Entrepreneurship important, why?