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Economics
Economics Defined Economy: the organized way a nation
provides for the needs and wants of it’s people
Economics: the management of the production, distribution and consumption of goods and services meeting unlimited wants with limited resources
Economic Activities1. Production: Make It!
2. Consumption: Use It!
3. Exchange: Trade It!
4. Distribution: Give It Out!
Economic Resources
Human Resources (entrepreneurship)
Natural Resources
Capital Resources
Human Resources People
Examples: Full-time Part-time Seasonal temp
There may be a shortage of workers for a certain job or profession: People lack training or skills needed People are not interested in filling certain jobs
Natural Resources Resources found in nature that can be used to
produce goods or services
Examples: Wildlife Plant life Weather conditions Minerals Natural gas
Natural resources become economic resources when used in production of goods and services
Capital Resources Used to produce a finished product
Reflects the state of technology that exists in society
Examples: Machinery Buildings Transportation Furniture, Computer equipment (technology)
Economic ResourcesR
ES
OU
RC
ES HUMANHUMAN
NATURALNATURAL
CAPITALCAPITAL
Why is resource limited?Why is resource limited?
Must be willing and able, lack of training
Earth is finite, pollution, wrong season, drought
Break (need repair), don’t last, poor quality
Human Resources Affect on Business
How do employers deal with a shortage of workers for a certain job or profession?
Offer higher wages
Offer training and retraining
Increase promotions/incentives
Increase technology
Natural Resources Affect on Business
All natural resources are limited
Some of the earth’s resources are difficult and costly to obtain
Not all countries have the ability to tap into all of their natural resources (lack technology and equipment)
When natural resources are limited, prices go up on products that require these resources (gas)
Capital Goods Affect on Business
Companies try to maintain the capital goods they already have to minimize cost
Companies look for alternative capital goods to increase profit and get an edge of competitors
They modify current technology to become more efficient
Three Economic Questions
What countries ask themselves when considering economic decisions
1. What product or services to produce?
2. How to produce those products and services?
3. For whom to produce the products and services?
Goods and Services Goods: Tangible
Can touch item
Services: Intangible Cannot touch item
Needs vs. Wants Needs: something you have to have (required)
Water, clothing, food
Wants: something you would like to have (desire) Designer clothes, sports car
Economic Wants Non-economic Wants:
Love, winning, good grades
Economic Wants: Material items, food
Scarcity The difference between what consumers
want and need and what the available resources are.
Unlimited Wants MINUS
Limited Resources EQUALS Scarcity
Economic Choices Trade off: Having to make a choice between
two or more things
Opportunity Cost: Everything you gave up by making that choice
Trade Off
Option A Option Bor
Opportunity Cost
Activity Students will complete a short activity
containing 7 process questions
Students may use class notes to complete this activity