Understand Understand responsible earning responsible earning and spendingand spending

4 basic economic 4 basic economic activities of consumersactivities of consumers

EarningEarning SpendingSpending SavingSaving BorrowingBorrowing

Student activitiy - Student activitiy - earningearning

When was the last time you did When was the last time you did something to earn money?something to earn money?

How did you earn it?How did you earn it? How did this make you feel?How did this make you feel?

Student Activity - Student Activity - spendingspending

How do you decide on what to spend How do you decide on what to spend your money?your money?

Student activity - savingStudent activity - saving

What was the last thing for which you What was the last thing for which you decided to save money? decided to save money?

How do you ‘make yourself’ save?How do you ‘make yourself’ save?

Student activity - Student activity - borrowingborrowing

When was the last time you decided to When was the last time you decided to borrow money or something else?borrow money or something else?

How did things turn out?How did things turn out? What are your views on borrowing and What are your views on borrowing and

lending?lending?

EarningEarning

Gaining money by working, owning a Gaining money by working, owning a business, or receiving investment business, or receiving investment returns. returns.

Money gained from earning is called Money gained from earning is called earningsearnings

3 activities that affect 3 activities that affect earningearning

Career choices – type of career/job and place Career choices – type of career/job and place of employmentof employment

Ability to find employment – education level; Ability to find employment – education level; employability skills; prior job performance; employability skills; prior job performance; economic conditions; workplace trends and economic conditions; workplace trends and opportunitiesopportunities

Ability to advance – type of career/job; Ability to advance – type of career/job; education level; job performance; economic education level; job performance; economic conditions; workplace trends and opportunitiesconditions; workplace trends and opportunities

Responsible earningResponsible earning

Involves realizing that career choices Involves realizing that career choices greatly affect lifetime earnings and greatly affect lifetime earnings and standard of living and considering these standard of living and considering these factors when making career choicesfactors when making career choices

SPENDINGSPENDING

Using money to purchase goods and Using money to purchase goods and services.services.

The way a person spends money The way a person spends money determines the value received and determines the value received and influences the economy.influences the economy.

Each purchase contributes to the demand Each purchase contributes to the demand for the product or service purchased.for the product or service purchased.

Law of ScarcityLaw of Scarcity

An economic system cannot produce all An economic system cannot produce all goods and services that consumers want, goods and services that consumers want, and most consumers do not have the and most consumers do not have the resources to purchase everything they resources to purchase everything they want. Choices must be made about how want. Choices must be made about how limited resources (time, money) are used.limited resources (time, money) are used.

Basic Economic ProblemBasic Economic Problem

We have UNLIMITED WANTS but have We have UNLIMITED WANTS but have LIMITED RESOURCESLIMITED RESOURCES

Trade Offs & Opportunity Trade Offs & Opportunity CostCost

When making a choice, other alternatives When making a choice, other alternatives must be sacrificed. The highest-valued must be sacrificed. The highest-valued alternative that must be given up when a alternative that must be given up when a choice is made is the OPPORTUNITY choice is made is the OPPORTUNITY COST of the choice. The choice of one COST of the choice. The choice of one item while giving up another is called item while giving up another is called TRADE OFF.TRADE OFF.

Responsible spendingResponsible spending

Includes researching and planning Includes researching and planning purchases in advance and making wise purchases in advance and making wise choices in light of opportunity costs and choices in light of opportunity costs and trade offs that applytrade offs that apply