Basic Economic Concepts

Basic Economic Concepts

A Look at Wants and Needs

What am I learning?

• The difference between wants and needs

• The difference between goods and services

• How resources limit the number of wants and needs that can be satisfied 

Why am I learning it?

Businesses make money by offering goods and services to satisfy the wants and needs of consumers. This is important because wants and needs drive the U.S. economy.

How will I know that I have learned it?

• I will be able to make a list of my wants and compare them to my needs.

• I will be able to list businesses that provide services and businesses that provide goods.

• I will be able to explain how my limited resources require me to make decisions.

Open Ended

What was the last thing you bought? Do you think this was a want or a need? Explain.

Wants vs. Needs

• Wants - things you do not have to have in order to survive, but would like to have (new computer/phone)

• Needs - things you must have in order to survive (food, water, clothing, shelter)
  

Multiple Select

How are public wants different from private wants? (check all that apply)

• Private wants can be shared.

• Public wants can be shared.

• Public wants can be wanted by one person.

• Private wants can be wanted by one person.

• Local, state, and federal governments provide private wants.

Goods vs. Services

• Goods - physical products; tangible (can be touched)

• Services - tasks that businesses perform for consumers; intangible (cannot be touched)

Multiple Select

Which of the following are considered a service?

How Resources Limit the Ability to Satisfy Wants and Needs

• People have unlimited wants for goods and services

• In the U.S. - most consumers are able to satisfy their basic needs

• The more money you make, the more goods & services you will be able to buy

• Resources - items that people can use to make or obtain what they need or want

How Resources Limit the Ability to Satisfy Wants and Needs

• Few people have enough resources to satisfy all their wants

• Resources limit the number of needs and wants people can satisfy

• Business and governments are influenced by the same problem

• To make the best use of limited resources, determine your needs and satisfy them first

Multiple Choice

What drives the economy?

• goods and services

• wants and needs

• resources

• consumers

Multiple Choice

Which is NOT true of public wants?

• They are widely shared by many.

• Government satisfies public wants.

• They are often considered private.

• Examples include highways and parks.

Multiple Choice

Which is a name for items people can use to make or obtain what they need or want?

• resources

• goods

• services

• products

Multiple Choice

Which is true of resources?

• Resources are unlimited.

• Businesses and governments lack resources.

• Insurance and tourism are examples of resources.

• Resources are limited.

Basic Economic Concepts

Business Activities

What am I learning?

• How profit and competition motivate businesses

• Activities businesses undertake when developing new products and services

• How business impacts me and how I impact business

Why am I learning it?

Businesses seek profit by providing goods and services. Companies thrive on competition. Competition and profit motivate businesses to continually strive to find new ways to satisfy customers.

How will I know I have learned it?

• I will be able to list various ways businesses compete.

• I will be able to list all 6 activities that businesses undertake when developing products and services.

• I will be able to explain how business impacts me and how I impact business.

Open Ended

Name a favorite product. List as many things as you can that have happened to that product before you actually see it in a store.

How to Define Business

• Business - any commercial activity that seeks profit by providing goods and services in exchange for money

• Profit - money left over after a business has paid the expenses of providing goods and services

How to Define Business

• Businesses provide consumers and other businesses with goods and services to satisfy needs and wants

• EX: food, clothing, housing, medical care, and transportation

The Motive of Business: To Make a Profit

• Without profit, a company cannot survive

• Profit is the reward for satisfying needs and wants of customers

• The wealth created by businesses benefits the entire community by paying taxes & providing jobs

The Significance of Competition

• Competition - the contest between businesses to win customers

• A direct response to wants and needs

• Competition is possible because companies have the freedom to produce products they think will be most profitable

The Significance of Competition

• Customers can compete to find the best products at the lowest prices

• The result - goods and services are produced and sold at the lowest possible cost

The Significance of Competition

• Some companies find a competitive edge by making high quality products

• Some focus on having no product defects 

• Neither of these will allow a business to stay competitive

• Offering quality products with outstanding service at a competitive price is a MUST

Poll

What is your favorite brand of athletic apparel?

• Nike

• Adidas

• Under Armour

• Champion

• My favorite brand isn't listed.

Business Activities

• Identify opportunities for products or services

• Evaluate the demand for products or services

• Obtain start-up money and operating capital

• Manage the production of goods/services

• Market the goods/services

• Keep records to satisfy government requirements & improve processes

Business Activities

• Market Research - act of gathering and analyzing information about the wants, needs, and preferences of consumers in a certain market

• Helps a business identify opportunities, analyze demand, and respond to consumer demand for goods & services

Business & You

• Businesses affect consumers when they decide to modify or discontinue products (EX: Taco Bell removing popular menu items)

• The decision to stop producing a specific product is typically due to low demand for that product

• Businesses affect you as a wage earner - they hire people to work

Business & You

• Consumers decide what products/services they want to buy; affecting businesses

• When consumers choose NOT to buy a product/service from a business, they typically fail

Multiple Choice

What is a commercial activity that seeks profit by providing goods in exchange for money?

• profit

• market research

• competition

• a business

Multiple Choice

What is profit?

• commercial activity

• motivation and wealth

• money remaining after costs have been paid

• an opportunity to earn a better living

Multiple Choice

Which is NOT true of businesses?

• They pay taxes and provide jobs.

• The wealth they create benefits the entire community.

• They are rewarded with profits by satisfying customers.

• They can survive without profits.

Multiple Choice

What is competition?

• a contest to win customers

• the freedom to produce new products

• voluntary exchange

• inexpensive goods and services

Multiple Choice

What is one result of effective market research?

• immediate access to global markets

• immediate access to start-up capital

• information that helps a business identify opportunities

• improved production management