1. Goods and Services
Unit 3: Standard 7

2. Learning Target:
(14) I can explain how companies determine which goods and services will be produced, how they will be distributed, and who will consume them.

3. “The system of production, distribution, and consumption.”
- economic system

4. “A person who buys or uses products and services.”
- consumer

5. “Human effort used to make goods and services.”
- labor

6. “Money invested in business; also, property and equipment used to produce goods or services.”
- capital

7. “Products that are manufactured and that consumers can buy and own.”
- goods

8. “Work that does not produce an actual product, but which consumers can buy.”
- service

9. How do companies determine which goods or services to produce?
Needs and wants of consumers
Size of market
Location of Market

10. How are goods and services distributed to businesses?
Cargo Planes
Cargo Boats
Semi Trucks
Railroads

11. How can transportation affect price?
Gas prices
Wages of transporters
Tariff (if foreign good)
Distance from business
Congestion (delays in traffic)
Vehicle maintenance/upkeep (replacing a blown tire)

12. Why do companies need to determine who will consumer their good or service?
To determine the amount of supply needed
Determine if it will sell in that market
How to advertise effectively

13. Learning Target:
15. I can determine how historical and current issues affect the global economy.

14. The problem of limited resources.
- Scarcity

15. What is speculation? How does it affect price?
Speculation – Engagement in business transactions that involves high risk, but offers the chance of large gains in hope of making profit from changes on the market.
Companies will adjust prices due to speculating a change in the economy or availability of a good/service
Example: I speculate the cost of a barrel of oil will go up by $10. I will raise the price of my gas so that the predicted oil cost will not hit me hard.

16. What can cause oil prices to go up?
War
Demand
Scarcity
Natural Disasters
Speculation

17. What can cause oil prices to go down?
Speculation
Surplus in supply
Peace in the Middle East
More oil production in the U.S.

18. What can affect the price of milk?
Gas prices
Limited supply of cows
Cost of cow feed
Quality of milk

19. Learning Target
16. I can explain how agriculture, tourism, and the growth of cities affect the economy of Alabama.

20. Agriculture – farming
Tourism – people visiting places; a means of revenue for a city
Urban Growth – Growth of cities

21. Alabama economy based on Agriculture: 20%
Alabama economy based on tourism: 5%
How does urban growth affect the economy of Alabama? – The more a city grows the more jobs are created which allows for more tax money to enter the state government.

22. The Alabama Legislature passed a bill a few years ago extending the summer break for schools. What was its purpose? How did it intend to affect the economy of Alabama?
The B.P. Oil Spill kept most people away from the beaches. This hurt the Alabama economy since 5% of it is tourism, also all the businesses were hurting. They were not allowed to pay their normal amount of taxes. This bill extended summer to give families that did go more time to spend money in the region.