Basic Economic Concepts

What is someone doing when they put money in a piggy bank instead of spending it?

• Investing

• Saving

• Wasting

• Borrowing

Producer

• A person or business that makes or sells goods and services.

• A type of consumer who only buys products.

• An individual who only provides services without selling goods.

• A business that only sells goods without providing services.

Q: What do we call someone who buys goods and services?

• A consumer

• A producer

• A retailer

• A supplier

Services

• Actions that people do for others (examples: haircuts, teaching, car repairs).

• Products that are sold in stores.

• Physical goods that can be touched and used.

• Activities that are done for personal enjoyment.

Goods

• Things that are made or grown and can be touched or used (examples: shoes, toys, apples).

• Items that are only digital and cannot be physically touched.

• Services provided by professionals, such as haircuts or car repairs.

• Things that are broken and cannot be used anymore.

What kind of resource is a worker’s skill or training?

• Human capital

• Natural resources

• Financial assets

• Social equity

Q: Is mowing a lawn a good or a service?

• A: Good

• B: Service

• C: Product

• D: Commodity

Natural Resource

• Something from nature that people use (examples: water, soil, trees).

• A man-made product that is used for construction.

• A type of renewable energy source.

• A financial asset that can be traded.

Q: What would cause the price of apples to go down?

• A: Too many apples and not enough buyers (high supply, low demand)

• B: A sudden increase in apple exports

• C: A decrease in the cost of apple production

• D: A rise in consumer income

Budget

• A plan for how to earn, save, and spend money.

• A document that tracks all expenses without any income.

• A strategy for investing in stocks and bonds.

• A method for calculating taxes owed.