2. Chapter 1
THE BIG IDEA…
Businesses make money by offering
goods and services to satisfy the wants
and needs of consumers and other
businesses. In this way, wants and needs
drive the U.S. Economy.
16. Chapter 1 VOCABULARY
Economic Resources
• Items that people can use to make or obtain
what they need or want.
• The means through which goods and services
are produced.
• Also called Factors of Production
22. Chapter 1 VOCABULARY
Scarcity
Not having enough resources to satisfy every
need.
Example:
Your allowance is $20 a week. Is this enough
money to satisfy all your needs and/or wants?
23. Chapter 1 VOCABULARY
Economic decision-making
The process of choosing which wants will be
satisfied.
Tradeoff
When you give up something to have something
else.
24. Chapter 1 VOCABULARY
Opportunity Cost
• The value of the next-best alternative that you
did not choose
• What you give up when you make a decision
Decision Opportunity Cost
Do your homework Watch TV
Go on a vacation Save money
Stay home See your friends
25. Chapter 1
Need advice…
You have a decision to make. Your best friend
called and told you they have tickets to a concert
you’ve been wanting to go to TONIGHT.
However, you’ve already promised your family
that you would go to dinner with them for your
Dad’s birthday. It’s impossible to do both. You
really want to go to the concert but don’t want to
cause hard feelings with your dad or family. How
do you go about making this decision?
26. Chapter 1
Decision Making Process
1. Define the problem.
2. Identify the choices.
3. Evaluate the advantages and
disadvantages of each choice.
4. Choose one.
5. Act on your choice.
6. Review your decision.
27. • Command Economy – Resources are owned
and controlled by the government.
• Market Economy – Resources are owned and
controlled by the people of the country.
• Traditional Economy – Goods and services are
produced the way it has always been done.
(used in less developed countries)
• Mixed Economy – combines elements of the
command and market economies.
28. Chapter 1 VOCABULARY
Competition
• The contest between businesses to win
customers.
• The rivalry among businesses to sell their goods
and services.
33. • Supply – the amount of goods and services that
producers will provide at various prices.
If consumers are Then sellers are willing
willing to pay more to supply more of that
for a good or service good or service
34. • Demand – is the amount or quantity of goods and
services that consumers are willing to buy at
various prices.
Consumers are willing to
consume more of a
good or service at a
lower price
35. • Market Price – is the point at which the
quantity demanded and the quantity supplied
meet.
36. How well can you balance supply and demand?
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