Satisfying Needs and Wants 1-1

Goals Explain the difference between needs and wants Distinguish between goods and services Describe the types of economic resources

Needs are Essential Determining what you need and want is an important part of decision making Needs: things that are required in order to live –Food –Water –Clean air –Shelter

Needs Continued In today’s society we also need –A good education –Employment –Safety –Transportation –People with health problems need medical care and medicines

Wants Add to the Quality of Life Wants: things that add comfort and pleasure to your life A small apartment meets the shelter need, people WANT a large house or a vacation home at the beach Public transportation may be a way to get around, driving a new car adds to convenience

Wants Continued Difficult sometimes to determine products and services that are needs and those that are wants Most products and services do more than meet your needs Make your life easier and more comfortable Your economic status and lifestyle will determine whether something is necessary or not

Unlimited Needs and Wants Your needs and wants never end New styles drive you to buy new clothes Latest gaming system New shoes lead you to buy a matching purse Wants are not the same for each person

Goods and Services You satisfy your needs and wants by purchasing and consuming goods and services Goods: things that you can see and touch –Products you can purchase Services: activities that are consumed at the same time they are produced –Intangible, not physical characteristic

Goods and Services for Business and Consumers Businesses Steel Plastic Gasoline Computers Electricity Security Accountants Consumers Watches Televisions Automobiles Cell phones Books Eat at restaurants Go on vacations Get car repaired

US Economy The US is the largest supplier of goods and services in the world Americans consumer more than any other country US has 2X as many shopping malls as it does high schools 1950: (1) car per family; 2000: 3+ cars per family

US Economy Continued American incur debt –Loans –Credit cards Not all Americans purchase beyond their means Spending options occur daily  careful decision making is important

Economic Resources How do we get the goods and services we need and want? –No longer create them (sewing, gardening, building) Economic Resources: the means through which goods and services are produced –A.K.A. Factors of Production –3 kinds of economic resources

1. Natural Resources Raw materials supplied by nature Oil, minerals, nutrients to grow crops, timber Oceans, lakes, rivers, air All products you consume begin with one or more natural resources

Chicken Noodle Soup Natural Resources Rich Farmland produces –Chickens –Vegetables –Spices Also from the land –Water –Aluminum

Natural Resources Continued The supply of natural resources is limited Increased consumption and environmental damages threaten the resources Conservation and more efficient practices help preserve

2. Human Resources People producing goods and services Entrepreneur: a risk taker who uses resources in an entirely new way to create a new product or service –Their creativity provides choices and opportunities

Chicken Noodle Soup Human Resources Farmers –Raise livestock and crops Factory workers Managers Engineers Truck drivers Sales people Advertisers Grocery store employees

3. Capital Resources Products and money used in production –Buildings –Equipment –Supplies –Money needed to build, buy supplies, pay employees, purchase services Some people invest money into business so the business will have the money to operate

Capital Resources Continued Some people invest money into business so the business will have the money to operate –They expect to make a profit

Chicken Noodle Soup Capital Resources –Money Pay employees Buy supplies –Building –Machines –Truck

Resources are Limited All economic resources are limited Most resources can be used to produce several produces and services Individuals, businesses and countries compete for resources and ownership of economic resources High demand  high price A limit on natural resources = a limit on what can be produced

Assessment 1-1 Worksheet