1. UNDERSTANDING ECONOMIC SYSTEMS
CH 1.3
UNDERSTANDING ECONOMIC SYSTEMS

2. SUPPLY AND DEMAND Lets read pages 19-21 together! Demand: Supply:
Quantities of a good or service that consumers are willing to buy at various prices and time periods
Supply:
Quantities of a good or service that producers are willing to sell at various prices and time periods
Equilibrium price:
The price at which the quantity supplied exactly equals the quantity demanded of that product.

3. Supply and demand graph

4. CAREER SIMULATION

5. ECONOMIC TERMS PRODUCTION: RESOURCES: SCARCITY:
the creation of goods and services
RESOURCES:
The raw materials, labor, knowledge, and equipment used in production.
SCARCITY:
Consumers wants are greater than the resources available

6. TYPES OF RESOURCES Human Natural Capital
Efforts of humans that add value to products
Natural
Limited resources available on the planet
Capital
Financial or monetary resources invested to produce products

7. TYPES OF ECONOMIES Traditional: Command: Market (Capitalist) Mixed
Production is passed through generations
Tribes in remote areas
Command:
Government owned
Companies are told what to sell
Market (Capitalist)
People own the businesses
Purpose is to generate a profit
Here in the U.S.
Mixed
Combination of a Command & Market (China)

8. CH 1.5
5 TYPES OF ADVERTISING

9. BRAND ADVERTISING
More likely for consumers to remember and know the brand
Examples? Catchy jingles? Funny commercials?
Famous Athletes, celebrities?
Cost of brand advertising is a higher price for the product or service
Coca-cola spends more money on advertising than any other product in the world
Why does brand advertising raise the price?

10. celebrities!

11. Product placement Putting brand name items
in a movie for everyone to see!

12. Product placement….
How many items do you see?

13. INFORMATIVE ADVERTISING
Consumers will buy the product based on what the product can do
(This is the correct way of consuming!!)
May include testimonial from satisfied costumers
Infomercials!

15. COMPARATIVE ADVERTISING
A comparison of one product to another (competitor)
Try to exploit the competitor’s weakness

16. comparative advertising

17. DEFENSIVE ADVERTISING
May be in response to a claim made by a competitor
The opposite of Comparative advertising
The wars between Pepsi and Coke in the 80’s

18. PERSUASIVE ADVERTISING
Ads try to appeal to emotions of the consumer
Their product will make you happy, successful, popular, etc…

19. Persuasive advertising