Indiana’s Economy Chapter 6, Lesson 3

Understanding the Economy Everybody needs to buy something sometime. Many people need to sell something, whether it is a good or a service. The bottom line is, you either use stuff (consumer) or make it (producer). An economy is all the activity involved with buying and selling. To have a strong economy, there needs to be buying and selling between consumers and producers. We can all be consumers AND producers.

Economy When you buy or sell something, you are taking part in our economy. The economy is the way a place uses its resources to produce goods and services. Every town, region, and state has an economy. How does Indiana’s economy affect you?

Global Economy Some of the goods that your family uses probably come from your community. Most goods, however, come from other places. Today, most countries of the world are part of a global economy. Countries around the world are connected to each other economically. interdependent – nations in the global economy rely on each other for goods, services, and resources

Needs and Wants Classify the following items as either needs or wants by adding them to the correct place on the chart: backpack home shoes vacation food dance class

All economies produce, or make goods. They offer services for people to buy and use. producer – a person or company that makes a good or service for people to buy or use o examples of producers consumer – a person or company that buys a good or service o examples of consumers

Relationship of Producers and Consumers Consumers depend on producers to make the goods or provide the services they need. Many people enjoy orange juice. But if no one has grown the trees, picked the oranges, packed the juice in a carton, put it on a truck, and driven it to your grocery store, it wouldn’t be there for you to buy and enjoy. Producers depend on consumers to buy what they make. Producers use advertising to make this happen. They want consumers to know that their product is just what consumers want. When consumers do not buy the product, the producers go broke.

There are two types of needs and wants: called goods and services. goods – actual products that you buy, such as a car, shoes, or apples services – things that other people do for you (actions), such as giving you music lessons or cutting your hair

Governments Provide Goods and Services online/content/6804 ISW week 31 - Government article

How needs and wants, goods and services, and consumers and producers fit together

At your table, give three examples of each: Goods Services Producers Consumers