1. 1 Economic Decisions and Systems 1-1 Satisfying Needs and Wants
C H A P T E R 1
Economic Decisions and Systems
1-1 Satisfying Needs and Wants
1-2 Economic Choices
1-3 Economic Systems
1-4 Supply and Demand

2. 1-1 Satisfying Needs and Wants
Goal 1 Explain the difference between needs and wants.
Goal 2 Distinguish between goods and services.
Goal 3 Describe the types of economic resources.

3. NEEDS AND WANTS Needs are essential
absolutely necessary; extremely important (adjective)
Needs are essential
Wants are not essential but add to the quality of life
Needs and wants are unlimited

4. What is the difference between a need and a want?
Needs are those things required to live.
Wants are things that add comfort and pleasure to our lives
Need: such as food, clothing, and shelter
Want: such as television, i-pod, and movies.

5. Checkpoint 
What are your needs and wants?
Need
Want 1. 2. 3. 4.

6. GOODS AND SERVICES Goods and services for businesses and consumers
The U.S. economy
People buy, use, and exchange goods and services.
A good is a physical item that can be bought, touched, and used. A service is the action done for people who pay for the service.
Have students look at needs and wants list, and assess what’s a good and what’s a service on their list (may have more goods than services)

7. GOOD OR SERVICE Flowers are a _______________
Paint is a _________________
Baker making cookies__________
Car _______________________
Doctor giving a shot___________
1. Flowers (GOOD)
2. Paint (GOOD)
3. Baker making cookies (SERVICE)
4. Car (GOOD)
5. Doctor giving a shot (SERVICE)

8. Checkpoint 
Route 9 Challenge

9. ECONOMIC RESOURCES Natural resources Human resources Capital resources
Always remember:
Resources are limited

10. ECONOMIC RESOURCES
Natural resources - water, land, trees, animals, and minerals.
Human resources - labor (people who run farms and factories, transport goods, provide services, or manage businesses).
Capital resources - money, land, buildings, tools, and equipment.

11. Producers
Producers
People and firms that use resources to make goods and services.

12. Good or Service (Possible Answers)
Checkpoint 
Producer
Good or Service (Possible Answers)
Resources
(Possible Answers)
Soil, water- natural
Team of gardeners- human
Shovel, rake, lawn mower- capital
Cuts grass and plants flowers, trees, and plants (Service)
1. Landscaper
Water, oil- natural
Baking assistants- human
Oven, mixer, bowl- capital
Baked Goods, Makes baked goods ( Service and a good)
2. Baker
3. Taxi, Bus, or
Truck Driver
Gasoline- natural
Drivers- human
Car, truck, bus- capital
Transports people and goods to a destination (Service)
Do 3 not 5
Give the names of the producer to students. Have students act out the producer without using words. The class will guess Who is the producer?
Explain that people use resources to produce a good or service. There are natural resources which are not manmade, human resources, which are the service providers, and capital resources which are the tools used to produce a good or service.
Have students brainstorm resources each producer uses and have students determine if each resource is a natural, human, or capital resource and whether it is a good or service. Write their answers in the resources column.
Explain to students that people who want particular goods and services and are willing to exchange
money with the people producing the good or service are called consumers.

13. 1-2 Economic Choices Goal 1 Understand the basic economic problem.
Goal 2 Explain the steps in the decision-making process.

14. THE BASIC ECONOMIC PROBLEM
When we talk of scarcity within an economic context, it refers to limited resources (Natural, Human, and Capital)
What is Opportunity Cost??
When something costs something, what does one have to do?
Our unlimited wants out number the limited resources leading to scarcity. When there is scarcity we have to make choices.
If I have to make a choice between two wants, I will make a trade-off by giving up one want for my 1st choice want or choice. This trade-off is known as opportunity costs.
Add bubble explaining opportunity cost

15. OPPORTUNITY COST 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.

16. CHOICES Think of a time you had to make a choice.
Did you make the best
choice?
Were you happy with
your decision?
If no, what would you
have done differently?
In order to make the best choice, one should use the Decision Making Process

17. 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.

18. MY TRICK
SO….to remember the decision making process remember Mickey’s car dying.
D efine the problem.
I dentify the choices.
E valuate the advantages and disadvantages of each choice.
C hoose one.
A ct on your choice.
R eview your decision.

19. 1-3 Economic Systems Goal 1 Identify the three economic questions.
Goal 2 Differentiate among the main types of economic systems.
Goal 3 Describe the economic system of the United States.

20. THE THREE ECONOMIC QUESTIONS
What to produce?
How to produce?
Who gets what is produced? OR What needs and wants to satisfy?

21. TYPES OF ECONOMIC SYSTEMS
Traditional economy
traditions, customs, and beliefs shape the goods and the products the society creates. Countries that use this type of economic system are less developed and not yet participating in a global economy.
Command economy
government agency that makes all the decisions about what to produce, and how, and for whom.

22. TYPES OF ECONOMIC SYSTEMS
How do the people answer these questions?
Market economy
an economy without any government intervention, where the people (producers and consumers) make the decisions about what to produce, and how, and for whom.
Mixed economy
an economic system where individuals and the government make economic decisions. It combines elements from market and command systems.

23. Checkpoint 
Of the three main choices can you identify the economic system of the United States?
The U.S. system best fits the definition of market economy because individual businesses and consumers make most of the decisions about what will be produced and consumed.

24. All economies are mixed to some degree.
The USA is as close to a market economy as you can get, but American companies still have to following government guidelines and regulation.
In contrast, Cuba (orange on this map) is a command economy, but some individuals still operate small businesses, which means that technically, it's mixed.
The countries that are highlighted dark green on this map have the most economic freedom (are as market as you can get). While the countries that are orange and red had less economic freedom, and some of those were command systems.

25. EXAMPLE OF FREEDOM OF CHOICES
To own the means of production (farm, factory, store, etc)
To participate in the decision making process
To travel freely (to sell, buy, work, etc)
To buy and sell what you want when you want
To hire and fire employees as you see fit for your business
To organize (workers' unions, professional associations, non-profit groups, etc.)
To communicate freely with media, business partner, competitors, etc.
To protest peacefully if the government over steps what you feel is appropriate without fear of punishment
To invest your money where and when you want
What are the 3 most important to you from this list???

26. 1-4 Supply and Demand
Goal 1 Describe supply and demand orally and with graphs.
Goal 2 Discuss how supply and demand affect prices of products and services.

27. PARTICIPATING IN A MARKET ECONOMY
Demand- quantity of a good or service that consumers are willing to buy?
Consumers set demand
Supply – refers to the amount of a good or service that businesses are willing to provide.
Producers establish supply

28. DEMAND AND SUPPLY

29. Checkpoint 
Cookie Challenge

30. DETERMINING PRICE Factors influencing demand
If consumers want or demand a particular good or service  prices tends to increase
Why is the price of a hotel room in Phoenix, Arizona higher in the winter than summer?

31. Identify a product that you have purchased in the past.
DETERMINING PRICE
Factors influencing demand
if there are many product/service substitute's, available price tends to decrease
Identify a product that you have purchased in the past.
Has your demand for this product increased or decreased since you made this purchase?
Are there many substitutes for this product and how does that affect demand?

32. EXAMPLES OF PRODUCTS WITH MANY SUBSTITUTES

33. DETERMINING PRICE Factors influencing supply
As the number of competitors increase  supply increases
If there was only one supermarket near Latham NY, and the next one was 50 miles away the prices at that store would be?

34. DETERMINING PRICE Factors influencing supply Who owns at least one
apple product?
New technology, these products have little competition at least in the beginning, which increases supply and pricing .

35. DETERMINING PRICE Factors influencing supply
Environmental changes or Natural Disasters, can effect supply of a natural resources
If resource is disrupted (decreases), supply decreases  increasing prices

36. DETERMINING PRICE Determining market price
Market price for a product or service is determined by the following:
Demand
Supply
Competition
The market price is the point at
which supply and demand are equal.

37. MARKET PRICE

38. MARKET PRICE