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Social Science. People’s Many Wants  We all have wants and needs in society  Basic wants are food, clothing, and shelter, while other wants are to be.

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Presentation on theme: "Social Science. People’s Many Wants  We all have wants and needs in society  Basic wants are food, clothing, and shelter, while other wants are to be."— Presentation transcript:

1 Social Science

2 People’s Many Wants  We all have wants and needs in society  Basic wants are food, clothing, and shelter, while other wants are to be educated, to be entertained, and to have good health care  Wants are determined by the environment, the societies in which we live in, and the person we are  Wants can change overtime, with styles coming and going to people growing older and wanting different things

3 Using Resources  Factors of production are the resources people have for producing goods and service to satisfy their wants  There are three basic factors in production:  Labor-the knowledge and skills used to work  Land-natural resources used to produce goods and services  Capital-anything produced in an economy that is used to produce other goods and services  can be tools, machines, buildings, food, etc.

4 Production to Consumption  Labor, land, and capital are combined to produce goods in a process called production  Production is followed by distribution, when the goods produced are made available to the public  Consumption occurs when the public buys and uses goods and services  All these combine in a process that is organize to satisfy a person’s particular wants

5 Making Choices  Because there aren’t enough goods to satisfy everyone’s wants, people must always make a choice as to which wants will be satisfied and which will not  The decision making process comes in two parts:  Benefits-which want will benefit you in the near or long-term future  Cost-what choosing a particular want will result in  Every economic decision has an opportunity cost, or the highest valued benefit given up when a choice is made

6 Scarcity  Society always faces scarcity, or when resources are always limited compared with the number and variety of wants people have  Based on the relationship between wants and the resources available to satisfy them  Each decision to use resources to produce one kind of good or service is also not to use the same resources to produce something else  Conservation of resources allows for production of more goods later on  These decisions are made usually by large businesses and governments

7 What and How?  One of the basic economic decisions made everyday are what to produce and the quantity, or amount, of that product to produce  Owners of products and resources make this decision  Another major decision is how to produce goods and services  Owners must decide how much of a resources goes into a product and how to use technology, or the practical application of science to commerce or industry, in the process to cut back on costs

8 Who Gets What  The last choice producers of goods must make is who gets the goods and services and how much of it do they get  Factors like types of people, location, and overall desires of the population come into play  To answer this question, a society can either split the goods evenly throughout the community or allow the citizens to compete for who gets what goods and services

9 Traditional Economics  The first type of economics is traditional economics, when basic economic decisions are made according to long-established patterns of behavior that are unlikely to change  The family, or tribe is the central part of traditional economics, and decide what to produce, how to produce it, and who gets what is produced  The people in the tribe usually have their own resources, so they can decide from day to day what they need to do

10 Command Economics  The second type of economics is command economics, where the government or a central authority owns or controls the factors of production and makes the basic economic decisions  A central planning group makes most of the economic decisions about how, what, and how much to produce  The group makes the choices as to the goods that are produced, and who gets these goods depends on the goals and values of the group

11 Market Economics  The third type of economics is market economics, in which private individuals own the factors of production and are free to make their own choices about production, distribution, and consumption  All economic decisions are made through a kind of bargaining process that takes place in markets, or a place or situation in which buyers and sellers agree to exchange goods and services  The value of what you have to offer sets the value of what you can get  People are free to decide how to use their resources as well as to start their own businesses and choose what jobs they want to do  Competition is favored in this economy, where people compete to gain the goods they want  People with more money usually acquire more goods

12 Market Economics  An incentive in a market economy that people use is to make a profit, or a difference between the total cost of production and the total revenues received from buyers  The desire to make a profit also leads people to invest, or to use money to help a business get started to grow, with the hope that the business will earn a profit in which you can share  There are two other names for a market economy:  Free enterprise: the system in which individuals in a market economy are free to undertake economic activities with little or no control by the government  Capitalism: the system in which people make their own decisions about how to save resources as capital and how to use their capital to produce goods and provide services

13 Modern-Day Economics  Today, most countries have a mixed economy, one that is a mixture of the three basic systems  The economy of China, even though it’s a Communist government, has a mixed economy of command and market economics  The economy of the United States, even though it’s a Democratic government, is a market economy with some elements of command economics  Certain businesses are controlled by the government

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