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Chapter 1


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Chapter 1

  1. 1. Intro to Business Economic Decisions Mr. Keown
  2. 2. Introduction <ul><li>Needs and Wants </li></ul><ul><li>Goods and Services </li></ul><ul><li>Factors of Production </li></ul><ul><li>Limited Resources </li></ul><ul><li>Decision Making </li></ul>
  3. 3. Needs & Wants <ul><li>What is a Need ? </li></ul><ul><ul><li>Things that are necessary for survival. </li></ul></ul><ul><ul><li>For example… </li></ul></ul><ul><ul><ul><li>Food, Clothing, and Housing </li></ul></ul></ul><ul><li>What is a Want ? </li></ul><ul><ul><li>Things not necessary for survival, but which add comfort and pleasure to our lives. </li></ul></ul><ul><ul><li>For example… </li></ul></ul><ul><li>There are Unlimited Wants. </li></ul>
  4. 4. Goods & Services <ul><li>What are Goods ? </li></ul><ul><ul><li>Goods are things you can see and touch. </li></ul></ul><ul><ul><li>For example… </li></ul></ul><ul><li>What are Services ? </li></ul><ul><ul><li>Our wants that are satisfied through the efforts of other people or by equipment. </li></ul></ul><ul><ul><li>For example… </li></ul></ul>
  5. 5. Factors of Production <ul><li>What are Factors of Production ? </li></ul><ul><ul><li>The means through which goods and services are produced. </li></ul></ul><ul><ul><li>Three (3) factors of production. </li></ul></ul><ul><ul><ul><li>Natural Resources </li></ul></ul></ul><ul><ul><ul><li>Human Resources </li></ul></ul></ul><ul><ul><ul><li>Capital Resources </li></ul></ul></ul>
  6. 6. Natural, Human, & Capital Resources <ul><li>Natural Resources </li></ul><ul><ul><li>Raw Materials supplied by nature </li></ul></ul><ul><ul><li>For example… </li></ul></ul><ul><ul><ul><li>All the materials that come from the earth, the water, or the air. </li></ul></ul></ul><ul><ul><ul><li>Iron ore, gold, oil, copper, etc. </li></ul></ul></ul><ul><li>Human Resources (Labor) </li></ul><ul><ul><li>The people who work to produce goods or services. </li></ul></ul><ul><ul><li>For example… </li></ul></ul>
  7. 7. Natural, Human, & Capital Resources <ul><li>Capital Resources (Capital) </li></ul><ul><ul><li>The tools, equipment, and buildings that are used to produce goods and services. </li></ul></ul><ul><ul><li>For example… </li></ul></ul><ul><ul><ul><li>Office buildings, factories, tractors, carpenters’ tools, computers, delivery trucks, display cases, etc. </li></ul></ul></ul><ul><ul><ul><li>Money </li></ul></ul></ul>
  8. 8. Limited Resources <ul><li>Since our resources are limited , we are limited in what we can build and produce. </li></ul><ul><li>Scarcity </li></ul><ul><ul><li>The conflict between unlimited wants and limited resources </li></ul></ul>
  9. 9. The Decision Making Process <ul><li>Define the problem </li></ul><ul><li>Identify the choices </li></ul><ul><li>Evaluate the advantages and disadvantages of each choice. </li></ul><ul><li>Choose </li></ul><ul><li>Act on your choice </li></ul><ul><li>Evaluate </li></ul>
  10. 10. Summary <ul><li>Needs and Wants </li></ul><ul><li>Goods and Services </li></ul><ul><li>Factors of Production </li></ul><ul><li>Limited Resources </li></ul><ul><li>Decision Making </li></ul>