Economics: Scarcity and Private Enterprise Copyright © Texas Education Agency, All rights reserved.

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Scarcity-The Basic Economic Problem Unlimited wants and needs Limited resources Copyright © Texas Education Agency, All rights reserved. 3

Economic Questions??? 3 Basic Economic Questions For whom will they be produced ? What goods will be produced ? How will goods be produced ? Copyright © Texas Education Agency, All rights reserved. 4

Who Makes the Economic Decisions? Free Economy-individual consumers Controlled Economy-government Mixed Economy-individual consumers and the government Copyright © Texas Education Agency, All rights reserved. 5

America’s Private Enterprise Economy Production resources are owned and controlled by individual producers Profit motive helps producers decide what to produce Copyright © Texas Education Agency, All rights reserved. 6

America’s Private Enterprise Economy Government stays out of exchange activities between producers and consumers unless individuals or society are harmed by the decisions. Value-An individual view of the worth of a product or service. Copyright © Texas Education Agency, All rights reserved. 7

America’s Private Enterprise Economy (continued) Consumers-individuals who purchase products and services to satisfy needs –Demand-relationship between the quantity of a product consumers are willing and able to purchase and the price. –Consumers gather information about available products and services to make choices. Copyright © Texas Education Agency, All rights reserved. 8

America’s Private Enterprise Economy (continued) Producers-businesses that use their resources to develop products and services. –Supply-a relationship between the quantity of a product that producers are willing and able to provide and the price. –Producers gather information about the types of products and services consumers want so they can provide items that will most likely be purchased. Copyright © Texas Education Agency, All rights reserved. 9

America’s Private Enterprise Economy (continued) Government –Ideal circumstances, producers and consumers interact with no government interference –Enacts laws and regulations to help those who are treated unfairly Copyright © Texas Education Agency, All rights reserved. 10

Economic Forces State of the Economy International Relationships Election Year Copyright © Texas Education Agency, All rights reserved. 11

Assignments Independent Practice Assignments #1 Design a poster illustrating the free market, mixed and controlled economies. Answer the 3 economic questions. #2 Identify profitable inventions; explain how profit motive is involved when inventing/producing products #3 Conduct research to determine marketing opportunities in China and possible barriers. Copyright © Texas Education Agency, All rights reserved. 12