Chapter 1 VOCABULARYNeeds and Wants…determine what products andservices businesses provide.
Chapter 1 VOCABULARYEconomic 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
Chapter 1 VOCABULARYNatural ResourcesRaw materials supplied by nature.
Chapter 1 VOCABULARYHuman ResourcesPeople producing goods and services.
Chapter 1 VOCABULARYCapital ResourcesThe products and money used in theproduction of goods and services.
Chapter 1 VOCABULARYResourcesNo one has enough resources to satisfyall their needs and wants.Resources are limited.
Chapter 1 VOCABULARYScarcityNot having enough resources to satisfy everyneed.Example:Your allowance is $20 a week. Is this enoughmoney to satisfy all your needs and/or wants?
Chapter 1 VOCABULARYEconomic decision-makingThe process of choosing which wants will besatisfied.TradeoffWhen you give up something to have somethingelse.
Chapter 1 VOCABULARYOpportunity 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
Chapter 1Need advice…You have a decision to make. Your best friendcalled and told you they have tickets to a concertyou’ve been wanting to go to TONIGHT.However, you’ve already promised your familythat you would go to dinner with them for yourDad’s birthday. It’s impossible to do both. Youreally want to go to the concert but don’t want tocause hard feelings with your dad or family. Howdo you go about making this decision?
Chapter 1Decision 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.
• 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.
Chapter 1 VOCABULARYCompetition• The contest between businesses to win customers.• The rivalry among businesses to sell their goods and services.
Chapter 1 Section 1.2Competition happens when…businesses continually try to improve theirproducts and services and do better than oneanother.
Chapter 1 VOCABULARYConsumerA person who buys and uses goods or services.
Chapter 1 VOCABULARYProducerIndividuals and organizations that determine whatproducts and services will be available for sale.
• 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 thatfor a good or service good or service
• 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
• Market Price – is the point at which the quantity demanded and the quantity supplied meet.
How well can you balance supply and demand?http://www.primarygames.com/socstudies/lemonade/start.htm