What is Economics How people or groups make choices about what to do with scarce resources. We can’t have everything we want (unlimited wants) We have limited money, time and natural resources. When we make a choice there is an opportunity cost in which we will be unable to choose something else that would satisfy our wants and needs. Our needs include water, food, clothing and shelter. 1

Economics Review  Economics is all about what?  Choices are based on what two things? Benefits and cost  Describe a situation where scarcity and opportunity cost were involved in choice making? 2

Think About It: 1. If you had $1,000, what would you spend it on? 2.If you had to earn $1,000, how would you do it?

What does economy mean? Where have you heard this word? MONEY! MONEY! MONEY! Think About It: Remember:

Economy- The way goods and services are produced and distributed in a place. How do you make it? How do you sell it? How do you buy it? Understand:

Economy 1. Get the resources needed to make the cars. 2. Make the cars in a factory and ship it out to dealerships. 3. Car dealership sells the car to customers. Everything we buy goes through many steps and many people before we get it. This creates jobs and incomes in countries around the world.

What does industry mean? Where have you heard this word? Businesses or Companies Think About It:

From where do people get the things needed to make goods? Where does the process start? You need corn to make chips, don’t ya? 1. Agricultural Industry (Primary)- Businesses like farming and ranching; makes use of the natural resources.

9 How do goods become goods? Where are they made? Who makes them? In factories, of course! 2. Manufacturing (secondary)- Industry Uses raw materials to make new products.

What about the businesses that sell the products? Or businesses that simply provide a service? 3. Service (tertiary) Industry- Provides help and services directly to the public; items that can not be made

11 3 Types of Industry 1.Agricultural 2.Manufacturing 3.Service How may I help you?

There are two types of things you can sell and buy.  Goods, or objects, you can walk away with in your hand  Services, or help, people can provide you Understand:

Service vs. Manufacturing Industry  Service industries produce intangible goods.  Manufacturing industries produce tangible goods.

Services- Intangible actions or activities that one person performs for another Examples: teaching, cleaning, cooking Goods- Tangible, or touchable, objects that satisfy what you need or want Examples: hamburgers, video game, pencils Goods vs. Services

1. Let’s see the manufacturing and service industries in action. Work with your table group Decide who will be the “Manufacturer”, the “Service Worker,” the Marketer and the Customer Activity

2. Manufacturers will make a paper airplane in any style they choose. They have one minute to reach their deadline and have a completed product. 3. Manufacturers will deliver their finished product to the service industry workers. 4. Service workers, think of a service that could be provided with your airplane. Write the name of the company on the side of the plane. 5. The Marketer will try and sell their product to the customer in a short sales pitch. Activity

What did the manufacturers do? Did all the finished products look the same? Made the good: a tangible good - NO What did the service workers do? Were they all selling the same service? Provided an intangible product: a service – NO How is this similar to conditions in the real world economy? Variety of quality, style, service, speed of delivery and manufacture etc. Summarize

18 Name and describe the 3 sectors of the Economy.