Consumer  Someone who purchases good and services Examples of goods vs. services Example of how you are a consumer Can the government be a consumer?

Demand  a consumer’s desire and willingness to pay a price for a good or service. the price of a good or service increases as its demand increases and vice versa.

 HPdexNM HPdexNM  What happens to the price of the hula hoop as the demand changes?

Supply  total amount of a good or service that is available to consumers. the supply provided by producers will rise if the price rises because all businesses look to maximize profits

Resources  Supply of money, materials, staff, and other assets

Scarcity  economic problem that happens because people have unlimited wants but resources are limited What does scarcity make people/businesses/governments do?

Opportunity Cost  The next best alternative that is given up when a choice is made. Angelo wants to put in a 50-gallon aquarium in his room. When he measured the room, Angelo discovered that he wouldn’t have enough space for his TV and the aquarium. ○ What are his choices? ○ What will he do? ○ What is the opportunity cost?

Credit  An agreement in which a borrower receives money to buy something now and repay the lender in the future with interest.

Interest  The charge for borrowing money, typically expressed as an annual percentage rate.

Put money in Savings account Receive interest Receive money as a loan Pay back loan plus interest

Wages  Income from working

Gross Income  Total earnings for total hours worked Before taxes

Net Income  Amount of earnings received after all deductions have been taken out

You’ve landed your first job. The local convenience store will pay you $8.00 per hour. You have agreed to work 25 hours per week. Quick, do the math! That was the good news. Now, here’s the bad news. You, like every other worker, must have some of your money withheld to pay taxes. This is how it breaks down: First week’s wages: $ Federal Tax Withheld (one exemption claimed on Form W-4): $9.00 State Taxes (amount varies from state to state): Social Security Tax Withheld: Medicare Tax: Total deductions: $25.30 Net Pay (what you take home): $174.70

Reconcile  Comparing the bank statement with your records to make sure the account balance is accurate.  What could be consequences if you don’t reconcile your account?

Savings Account  An account at a bank that is for money you don’t use on a daily basis. It is secure and earns a small amount of interest. typically cannot write checks from the account the account is likely to have a limited number of free transfers/transactions.

Checking Account  An account at a bank that allows for withdrawals and deposits. Money can be withdrawn using checks, automated cash machines and electronic debits, among other methods.

Limited ResourcesUnlimited Wants People can’t have everything they want

OR Wants Resources Scarcity