C H A P T E R 1 Economic Decisions and Systemshespinosa.weebly.com/uploads/2/3/5/5/23554876/pob_ch01.pdf · © 2012 Cengage Learning. All Rights Reserved. Principles of Business,

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e

C H A P T E R 1 SLIDE 1

1-1 Satisfying Needs and Wants

1-2 Economic Choices

1-3 Economic Systems

1-4 Supply and Demand

1 C H A P T E R

Economic Decisions

and Systems

© 2012 Cengage Learning. All Rights Reserved. SLIDE 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.



KEY TERMS

● needs

● wants

● goods

● services

● economic resources



NEEDS AND WANTS

● Needs are essential

● Wants add to the quality of life

● Needs and wants are unlimited



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.



GOODS AND SERVICES

● Goods and services for businesses and

consumers

● The U.S. economy



Checkpoint

● How do people satisfy their wants and

needs?

● People satisfy their wants and needs by

purchasing and consuming goods and

services.



ECONOMIC RESOURCES

● Natural resources

● Human resources

● Capital resources

● Resources are limited



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.


1-2 Economic Choices

Goal 1 Understand the basic economic

problem.

Goal 2 Explain the steps in the decision-

making process.



KEY TERMS

● scarcity

● economic decision-making

● trade-off

● opportunity cost


C H A P T E R 1 SLIDE 12 THE BASIC ECONOMIC

PROBLEM

● Choices

● Trade-offs and opportunity costs



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.


C H A P T E R 1 SLIDE 14 THE DECISION-MAKING

PROCESS

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.



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.


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.



KEY TERMS

● economic system

● command economy

● market economy

● traditional economy

● mixed economy

● capitalism


C H A P T E R 1 SLIDE 18 THE THREE ECONOMIC

QUESTIONS

● What to produce?

● How to produce?

● What needs and wants to satisfy?



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?


C H A P T E R 1 SLIDE 20 TYPES OF ECONOMIC

SYSTEMS

● Command economy

● Market economy

● Traditional economy

● Mixed economies



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.


C H A P T E R 1 SLIDE 22 THE U.S. ECONOMIC

SYSTEM

● Private property

● Freedom of choice

● Profit

● Competition



Checkpoint

● Name the four principles of the U.S.

economic system.

● Private property

● Freedom of choice

● Profit

● Competition


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.



KEY TERMS

● consumer

● producers

● demand

● supply

● market price


C H A P T E R 1 SLIDE 26 PARTICIPATING IN A

MARKET ECONOMY

● Consumers set demand

● Producers establish supply

● A graphic view



DEMAND AND SUPPLY



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.



DETERMINING PRICE

● Factors influencing demand

● Factors influencing supply

● Determining market price



MARKET PRICE



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.

Documents

C H A P T E R 1 Economic Decisions and Systemshespinosa.weebly.com/uploads/2/3/5/5/23554876/pob_ch01.pdf · © 2012 Cengage Learning. All Rights Reserved. Principles of Business,