Economics Part 1

Economics

​Every day, people all over the world purchase goods and services from other people. Goods are products that people use, such as food and tools. Services are things that people do. For example, a school nurse provides a service by helping students who are sick and hurt.

​Scarcity & Choice

​We all face the same basic problem. This problem is scarcity.

​Scarcity is when there are not enough resources to meet people's wants.

Multiple Choice

Being in short supply or a shortage

• Opportunity Cost
• Consumption
• Price
• Scarcity

Multiple Choice

If there are only 100 televisions on sale and 200 people want to buy TV's, that is a problem of ____. 

• desire
• demand
• supply
• scarcity

Scarcity forces us to make choices. We must decide what things we need and want. Choices always come with costs. For every choice you make, you give up something else. In economics that us called a tradeoff.

​

​Can you think of a time you made a huge tradeoff?

Multiple Choice

Choosing between a set of alternatives. 

• Choice
• Price
• Supply
• Demand

​​The value of the thing you give up in a tradeoff is called an opportunity cost.

​For example, suppose you get money for your birthday. You want to use it to buy a new video game, but your friends invite you out to the movies. You don't have enough money for both. If you choose the game, the value of the movies is the opportunity cost.

Multiple Choice

What is given up when a choice is made.

• Production
• Opportunity Cost
• Supply
• Scarcity

Multiple Choice

What is an opportunity cost?

• additional money that is made from a unique opportunity

• problem of having more wants than available resources

• system of buying or selling goods

• the value of the thing that is given up when a choice is made

​The price of a good or service is usually determined by the laws of supply and demand.

​Supply is the amount of a good or service that businesses are willing and able to produce.

​

​Demand is the desire to have a good or service and the number of people who are ready to buy it at a certain price.

Multiple Choice

The amount of a good or service that is available.

• Opportunity Cost
• Production
• Supply
• Demand

Multiple Choice

The amount of good or service consumers are willing and able to buy.

• Supply
• Demand
• Choices
• Opportunity Cost

​Supply & Demand

​Whenever you buy something, you make a choice about the product & the price. Your choice and those of other consumers help determine what sellers will produce and what they will charge for it.

Multiple Choice

When the demand for a product or service is higher than the supply this causes what?

• shortage
• consumer
• surplus
• equilibrium

Multiple Choice

When the supply of a product is higher than the demand of a product, what usually happens to the price?

• rises

• falls

• remains the same

• equilibrium

​Incentives

​Incentives, or benefits, also influence economic activity. Profit is a major incentive for both individuals and businesses.

Profit is the money an individual or business has left after paying expenses.

​

​Someone give me an example of an individual or business making a profit.

Multiple Choice

Something that motivates an individual to perform an action

• Supply
• Demand
• Incentive 
• Price

Factors of Production

In order to produce a good or service, producers must combine four type of resources often called, factors of production. They are

- Natural resources - things made by nature

- human resources - the workers that create the goods and services

- capital - the "stuff" needed to create the goods and services...the buildings, tools, machines and money needed to produce the goods and services

-entrepreneur - the person with the idea who takes a risk to become a business owner

Multiple Choice

The tools, machines and buildings that are used to make goods and services.

• Human Resources
• Natural Resources
• Capital Resources 

Multiple Choice

The person who comes up with the idea and starts a business.

• Consumption
• Entrepreneur

• Opportunity Cost
• Price

Multiple Choice

The employees of a business.

• Natural Resource
• Capital Resource
• Human Resource

Multiple Choice

Something that is found in nature and can be used by people to produce products.

• Natural Resource 
• Human Resource
• Capital Resource

Multiple Choice

Combining of human, natural, capital and entrepreneurship resources to make goods and services.

• Consumption
• Production
• Opportunity Cost
• Supply

Economies

​An economy is a system of producing, selling, & buying goods an services. There are four types of economies.

Multiple Choice

What is an economy?

• a system of producing, selling, & buying goods an services

• a system of trading off something for something more important

• a situation where you don't have enough money to go to the movies

Traditional Economy

In a traditional economy ....
- decisions are based on tradition and custom
-things are done the way they have alwoys been done, people
- people often perform the same type of work as their parents and
grandparents
- these are often villages or tribes in Africa and Asia

Command Economy

In a command economy ....
- there is central or government ownership of the property and resources
-the government plans and controls the economy
-There is NO consumer choice or competition
- North Korea and Cuba are examples of command economies

Free Market Economy

In a Free Market economy ....
- there is private ownership of the property and resources
-Consumer choice drives supply and demand
-There is competition and individual choice
- the consumers purchases help decide what producers make = Consumer Sovereignty
-there are no true 100% free market economies in the world today

Mixed Economy

In a Mixed economy ....
- individuals, businesses and the government make the decisions of what to buy and sell
-the government make decisions about the "public" sector
-Most economies today are a Mixed economy

Multiple Choice

The four types of economic systems are: 

• Traditional, Command, Mixed, & Market
• Traditional, Command, Combined, & Market
• Communism, Capitalism, Free Market, and Macroeconomics
• Microeconomics, Macroeconomics, Individual, and Traditional.

Multiple Choice

The Country of North Korea has a dictator that makes all of the economic decisions. What type of economy is this?

• Traditional

• Market

• Command

• Mixed

Multiple Choice

In my country my job is the same one that my family has done over the past 200 years.

• Traditional

• Command

• Market

• Mixed

Multiple Choice

The central power decides when to expand old factories and build new ones.

• Traditional

• Command

• Market

• Mixed

Multiple Choice

There are four types of economic systems. Most economies are _____.

• Traditional

• Command

• Market

• Mixed

Multiple Choice

In a command economy, who holds power over the economy?

• The people
• The government 
• Beyonce
• The traditions of your ancesetors 

Multiple Choice

If the government makes me produce 70 T-Shirts, what economic system is this?

• Mixed

• Traditional

• Command

• Market

Multiple Choice

The act or process of using up something (such as food or coal)

• Consumption
• Incentives 
• Scarcity
• Price

Multiple Choice

What is scarcity?

• money an individual makes from a job

• the issue of having unlimited human wants in a world of limited resources

• value of the thing that we give up

Multiple Choice

If I choose to produce fish for my town because my mom and dad were fishermen/women, what economic system is this?

• Mixed

• Market

• Traditional

• Command

Multiple Choice

The amount of money that you pay for something; or how much something costs.

• Scarcity
• Opportunity Cost
• Demand
• Price

Multiple Choice

What is supply?

• the desire for a good or service

• the amount of money you have left after expenses are paid

• the amount of a good or service that is available for purchase

• the popularity of a good or service

Multiple Choice

What is demand?

• the desire to have a good or service and the number of people ready to buy it

• system of buying and selling goods and services

• the issue of running out of supplies

Multiple Choice

What is a want?

• A person
• Something you would like to have but don't need to live
• Purple
• Something you need to live

Multiple Choice

What is a need?

• Nothing
• Something you have to have to live
• Something you would like to have
• Ice cream

Multiple Choice

_____________ are things that people make or use to satisfy their needs and wants.

• Goods

• Services

• Producers

• Consumers

Multiple Choice

________________ are activities that satisfy people’s needs and wants.

• Goods

• Services

• Needs

• Wants