© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE Satisfying Needs and Wants Economic Choices Economic Systems Supply and Demand 1 C H A P T E R Economic Decisions and Systems

© 2012 Cengage Learning. All Rights Reserved. SLIDE 2 1-1Satisfying Needs and Wants Goal 1Explain the difference between needs and wants. Goal 2Distinguish between goods and services. Goal 3Describe the types of economic resources.

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 3 KEY TERMS ●needs ●wants ●goods ●services ●economic resources

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 4 NEEDS AND WANTS ●Needs are essential ●Wants add to the quality of life ●Needs and wants are unlimited

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 5 Checkpoint ●What is the difference between a need and a want? ●Needs are those things required to live, such as food, clothing, and shelter. ●Wants are things that add comfort and pleasure to our lives such as television, music CDs, and movies.

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 6 GOODS AND SERVICES ●Goods and services for businesses and consumers ●The U.S. economy

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 7 Checkpoint ●How do people satisfy their wants and needs? ●People satisfy their wants and needs by purchasing and consuming goods and services.

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 8 ECONOMIC RESOURCES ●Natural resources ●Human resources ●Capital resources ●Resources are limited

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 9 Checkpoint ●What are the three types of economic resources? Give an example of each type. ●Natural: water, land, trees, animals, and minerals. ●Human: labor (people who run farms and factories, transport goods, provide services, or manage businesses). ●Capital: money, land, buildings, tools, and equipment.

© 2012 Cengage Learning. All Rights Reserved. SLIDE Economic Choices Goal 1Understand the basic economic problem. Goal 2Explain the steps in the decision- making process.

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 11 KEY TERMS ●scarcity ●economic decision-making ●trade-off ●opportunity cost

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 12 THE BASIC ECONOMIC PROBLEM ●Choices ●Trade-offs and opportunity costs

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 13 Checkpoint ●What is opportunity cost? ●Opportunity cost is the value of the next best alternative that you don’t choose. ●It is what you are willing to give up in order to have your first choice.

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 14 THE DECISION-MAKING PROCESS 1.Define the problem. 2.Identify the choices. 3.Evaluate the advantages and disadvantages of each choice. 4.Choose one. 5.Act on your choice. 6.Review your decision.

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 15 Checkpoint ●What are the six steps in the decision-making process? ●Define the problem. ●Identify the choices. ●Evaluate advantages and disadvantages of each alternative. ●Choose one. ●Act on your choice. ●Review your decision.

© 2012 Cengage Learning. All Rights Reserved. SLIDE Economic Systems Goal 1Identify the three economic questions. Goal 2Differentiate among the main types of economic systems. Goal 3Describe the economic system of the United States.

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 17 KEY TERMS ●economic system ●command economy ●market economy ●traditional economy ●mixed economy ●capitalism

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 18 THE THREE ECONOMIC QUESTIONS ●What to produce? ●How to produce? ●What needs and wants to satisfy?

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 19 Checkpoint ●What are the three 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?

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 20 TYPES OF ECONOMIC SYSTEMS ●Command economy ●Market economy ●Traditional economy ●Mixed economies

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 21 Checkpoint ●What are the main differences among the three economic systems? ●The main differences among the economic systems are found in the ways in which the three economic questions are answered.

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 22 THE U.S. ECONOMIC SYSTEM ●Private property ●Freedom of choice ●Profit ●Competition

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 23 Checkpoint ●Name the four principles of the U.S. economic system. ●Private property ●Freedom of choice ●Profit ●Competition

© 2012 Cengage Learning. All Rights Reserved. SLIDE Supply and Demand Goal 1Describe supply and demand orally and with graphs. Goal 2Discuss how supply and demand affect prices of products and services.

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 25 KEY TERMS ●consumer ●producers ●demand ●supply ●market price

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 26 PARTICIPATING IN A MARKET ECONOMY ●Consumers set demand ●Producers establish supply ●A graphic view

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 27 DEMAND AND SUPPLY

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 28 Checkpoint ●How does the price of a product affect demand and supply? ●As prices decrease, the number of consumers willing and able to purchase the product (demand) will increase. ●As prices increase, businesses will be willing to supply larger quantities of the product.

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 29 DETERMINING PRICE ●Factors influencing demand ●Factors influencing supply ●Determining market price

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 30 MARKET PRICE

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 1 SLIDE 31 Checkpoint ●How is the market price for a product determined? ●Supply, demand, and competition determine the market price for a product or service. ●The market price is the point at which supply and demand are equal.