Intro to Business Unit 1 Chapter 1

Need things that are a must to survive Ex: Water Want things that make life more comfortable or enjoyable Ex: Chocolate

Chapter 1 Good items that you can physically see and touch Services are activities that are consumed at the same time they are produced

Chapter 1 Economic Resources are the means through which goods and services are produced  Natural  Human  Capital

Natural Resources  Raw materials that are supplied by nature

Human Resources  People who are producing goods and services.

Capital Resources  The products and money used in the production of goods and services.

Scarcity-Basic Economic Problem  Means not having enough resources to satisfy every need  Tradeoff What you will give up to having something else.  Opportunity Cost Is the value of the next best alternative

The Decision Making Process  Define the problem  Identify the choices  Evaluate the advantages and disadvantages  Choose one  Act on your choices  Review your decision

Economic Systems  Basic Economic Questions What goods and services will be produced? How will the goods and services be produced? What needs and wants will be satisfied with the goods and services produced?

ECONOMIC SYSTEMS A nation’s plan for answering the key economic questions

Economic Systems  Traditional-same as always  Ex. Amish, Tribes  Command-government has answers to questions  Ex. Cuba, North Korea

Economic Systems  Market-individuals answer the questions  Ex. EBay, auction  Mixed-combination of market and command  Ex. U.S. most countries

U.S. Economic System Components  Private Property  Freedom of Choice  Profit  Competition  Private Enterprise

Law of Demand  Consumers set demand  Ex: Tickets to a game or concert

Law of Supply  Producers establish supply levels.

Chapter One Review  Terms Wants, needs, goods, services, scarcity  Economic Resources  Decision Making Process  Economic Questions  Economic Systems  U.S. Economic System Components  Supply/Demand Curves