Economics Economics Defined Economy the organized way a

Economics

Economics Defined Economy: the organized way a nation provides for the needs and wants of it’s people Economics: the management of the production, distribution and consumption of goods and services meeting unlimited wants with limited resources

Economic Activities 1. Production: Make It! 2. Consumption: Use It! 3. Exchange: Trade It! 4. Distribution: Give It Out!

Economic Resources Human Resources (entrepreneurship) Natural Resources Capital Resources

Human Resources People Examples: Full-time Part-time Seasonal temp There may be a shortage of workers for a certain job or profession: People lack training or skills needed People are not interested in filling certain jobs

Natural Resources found in nature that can be used to produce goods or services Examples: Wildlife Plant life Weather conditions Minerals Natural gas Natural resources become economic resources when used in production of goods and services

Capital Resources Used to produce a finished product Reflects the state of technology that exists in society Examples: Machinery Buildings Transportation Furniture, Computer equipment (technology)

Economic Resources RESOURCES Why is resource limited? HUMAN Must be willing and able, lack of training NATURAL Earth is finite, pollution, wrong season, drought CAPITAL Break (need repair), don’t last, poor quality

Human Resources Affect on Business How do employers deal with a shortage of workers for a certain job or profession? Offer higher wages Offer training and retraining Increase promotions/incentives Increase technology

Natural Resources Affect on Business All natural resources are limited Some of the earth’s resources are difficult and costly to obtain Not all countries have the ability to tap into all of their natural resources (lack technology and equipment) When natural resources are limited, prices go up on products that require these resources (gas)

Capital Goods Affect on Business Companies try to maintain the capital goods they already have to minimize cost Companies look for alternative capital goods to increase profit and get an edge of competitors They modify current technology to become more efficient

Three Economic Questions What countries ask themselves when considering economic decisions 1. What product or services to produce? 2. How to produce those products and services? 3. For whom to produce the products and services?

Goods and Services Goods: Can Tangible touch item Services: Cannot Intangible touch item

Needs vs. Wants Needs: something you have to have (required) Water, Wants: clothing, food something you would like to have (desire) Designer clothes, sports car

Economic Wants Non-economic Love, Wants: winning, good grades Economic Material Wants: items, food

Scarcity The difference between what consumers want and need and what the available resources are. Unlimited Wants MINUS Limited Resources EQUALS Scarcity

Economic Choices Trade off: Having to make a choice between two or more things Trade Off Option A or Option B Opportunity Cost Opportunity that choice Cost: Everything you gave up by making

Activity Students will complete a short activity containing 7 process questions Students activity may use class notes to complete this