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Economic Decisions and Systems

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Presentation on theme: "Economic Decisions and Systems"— Presentation transcript:

1 Economic Decisions and Systems
CHAPTER 1 4/21/2017 1 Economic Decisions and Systems 1-1 Satisfying Needs and Wants 1-2 Economic Choices 1-3 Economic Systems 1-4 Supply and Demand ITB

2 NEEDS AND WANTS Needs are essential
Wants add to the quality of life – add comfort and pleasure to your life. Needs and wants are unlimited - they never end! Chapter 1

3 GOODS AND SERVICES Goods and services for businesses and consumers
Goods – things you can see & touch Services – activities consumed at the same time they are produced. The U.S. economy – largest producer of goods and services in world. Chapter 1

4 ECONOMIC RESOURCES – are the means through which goods & services are produced.
Natural resources – raw materials supplied by nature Human resources – people producing goods and services (example- employees) Capital resources – the products and money used in the production of goods and services (example – pick up truck, factory, lumber) Resources are limited Chapter 1

5 THE BASIC ECONOMIC PROBLEM – the mismatch of unlimited wants and needs and limited economic resources. Scarcity – means not having enough resources to satisfy every need. Economic decision-making - is the process of choosing which wants, among several options, will be satisfied. Tradeoffs – give up something to have something else. Opportunity costs – the value of the next-best alternative that you did not choose. Chapter 1

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. Chapter 1

What to produce? How to produce? What needs and wants to satisfy? Chapter 1

8 TYPES OF ECONOMIC SYSTEMS – nation’s plan for answering the three economic questions.
Command economy – resources are owned and controlled by the government. Market economy – the resources are owned and controlled by the people of the country. Traditional economy – goods and services are produced the way it has always been done. Used in less developed countries and not yet participating in the global economy. Mixed economies – combines elements of the command and market economies. Chapter 1

9 THE U.S. ECONOMIC SYSTEM – another name in United States is capitalism.
Private property Freedom of choice Profit Competition Chapter 1

10 LESSON 1-4 Supply and Demand
Goals Describe supply and demand orally and with graphs. Discuss how supply and demand affect prices of products and services. Chapter 1

Consumers set demand Producers establish supply A graphic view Chapter 1


13 DETERMINING PRICE Factors influencing demand
Factors influencing supply Determining market price Chapter 1

14 MARKET PRICE Chapter 1

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