Presentation is loading. Please wait.

Presentation is loading. Please wait.

1 Economic Decisions and Systems 1-1 Satisfying Needs and Wants

Similar presentations

Presentation on theme: "1 Economic Decisions and Systems 1-1 Satisfying Needs and Wants"— Presentation transcript:

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 KEY TERMS needs wants goods services economic resources

4 NEEDS AND WANTS Needs are essential to your life
Wants add to the quality of life Needs and wants are unlimited Examples? Different for you and your parents?

5 Checkpoint  What is the difference between a need and a want?
Needs are those things required to live, such as food, clothing, and shelter. Wants are things that add comfort and pleasure to our lives such as television, music CDs, and movies.

6 GOODS AND SERVICES What is the difference?
Goods are manufactured and sold Services are provided You purchase and use services to satisfy your wants and needs, but unlike goods, businesses must provide services to you at the time you want to consume them.

7 The U.S. economy The largest producer Also the largest consumer
More than the next two combined China and Japan Also the largest consumer Largest consumer of oil More than the next four combined Why did this happen? Shift from agricultural to an industrial economy

8 Checkpoint  How do people satisfy their wants and needs?
People satisfy their wants and needs by purchasing and consuming goods and services.

9 ECONOMIC RESOURCES Natural resources Human resources Capital resources
Raw materials provided by mother nature Human resources People who produce goods and services Capital resources Equipment and money used in production Resources are limited

10 Checkpoint  What are the three types of economic resources? Give an example of each type. Natural: water, land, trees, animals, and minerals. Human: labor (people who run farms and factories, transport goods, provide services, or manage businesses). Capital: money, land, buildings, tools, and equipment.

11 1-2 Economic Choices Goal 1 Understand the basic economic problem.
Goal 2 Explain the steps in the decision-making process.

12 KEY TERMS scarcity economic decision-making trade-off opportunity cost

What is the Basic Economic Question? Unlimited wants and needs VS limited economic resources Scarcity Not having enough resources to satisfy every need

14 Economic Decision Making
The process of choosing which needs and wants will be satisfied Choices Scarcity forces you to make decisions among the alternatives

15 Trade-offs and opportunity costs
When you give up something to have something else Opportunity Cost The value of the next-best alternative that you were not able to choose Examples?

16 Checkpoint  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.

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 Checkpoint  What are the six steps in the decision-making process?
Define the problem. Identify the choices. Evaluate advantages and disadvantages of each alternative. Choose one. Act on your choice. Review 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 KEY TERMS economic system command economy market economy
traditional economy mixed economy capitalism

What to produce? How to produce? What needs and wants to satisfy? How are they different in different countries?

22 Checkpoint  What are the three economic questions?
What goods and services will be produced? How will the goods and services be produced? What needs and wants will be satisfied with the goods and services?

Command economy Resources are owned and controlled by the government of the country Market economy 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. The traditional economy is used in countries that are less developed Mixed economies Combines elements of the command and market economies

25 Checkpoint  What are the main differences among the three economic systems? The main differences among the economic systems are found in the ways in which the three economic questions are answered.

26 THE U.S. ECONOMIC SYSTEM Capitalism Based on four principles
Private property Freedom of choice Profit Competition

27 Checkpoint  Name the four principles of the U.S. economic system.
Private property Freedom of choice Profit Competition

28 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.

29 KEY TERMS consumer producers demand supply market price

Consumers set demand Producers establish supply Between the two, a market price is set A graphic views



33 Checkpoint  How does the price of a product affect demand and supply?
As prices decrease, the number of consumers willing and able to purchase the product (demand) will increase. As prices increase, businesses will be willing to supply larger quantities of the product.

34 DETERMINING PRICE Factors influencing demand
Need, available substitutes Factors influencing supply Competition Natural Disaster Determining market price The point where supply and demand are equal


36 Checkpoint  How is the market price for a product determined?
Supply, demand, and competition determine the market price for a product or service. The market price is the point at which supply and demand are equal.

Download ppt "1 Economic Decisions and Systems 1-1 Satisfying Needs and Wants"

Similar presentations

Ads by Google