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Chamberlain
What is an Economy?Who’s part of the
economy?What do you need
for there to be an economy?
Are you part of the US Economy?
Before we answer that…I want you to think of two things that you
really want to buy….it could be something you need or something that you just want.Actual good or a Service
I want the two things to be relatively close in price. Search the net for these objects and list the price and object on a piece of scrap paper.
Now what is an economy?What is your object/service you want/need?Where can you get it?Who makes the product if it is someone
different from where you are buying?Is your item a
LuxuryNecessity
What is a consumer? Are you a consumer
EconomySystem for producing and distributing goods
and services to satisfy a consumer’s needs and wantsTakes place at the Market
Place where buyers and sellers come togetherNeeds vs. Luxuries
How are the products and services we need and want produced?
Factors of Production: resources for producing goods and servicesEntrepreneur – the person or company
that developed the ideaLand – resources used to make your
product or provide your serviceLabor – Effort to create your productCapital –
Financial – Money to create product or serviceCapital good – goods used to create products
and services
Hula Hoop
Hula HoopAncient toy
No one person or company can claim “inventing” the hoop
Wham-O Company from LA made first plastic Hula Hoop
in 1948Sold 100 million in first year
How does your product fit in the Factors of Production?Land: Take your two products and make a
list of materials you would need to make the product.
Labor: What kind of labor would go into making your product/service?
Capital Goods – Oven to make pizzasFinancial Capital – Money to market and
create your product or service?
Create your own product or service.On a piece of paper, come up with a product
or service (school appropriate) you would want to invent or sell
Give your product a name and then go through the factors of production to decide how your product or service would be created
Entrepreneur, Land, Labor, and Capital
Buyers and SellersSellers
Goal is to maximize profitsTotal cost (land labor and capital) – Total
revenue = profitHow – Find your target market
Buyers/ConsumersSellers are often buyers…Choice
Both buyers and sellers deal with scarcity???
Scarcity Our needs and wants are unlimitedBut
MoneyResourcesTimeGood jobs
Are All Limited!!!!Even the wealthiest peopleEven the wealthiest countries Deal with Scarcity
Result of ScarcityChoices
Luxuries vs NecessitiesSubway or McDonald’s
Opportunity CostThe goods and services you give up when you
make a choiceSnow blower (me) vs. Treadmill (my wife)We bought the treadmillThe snow blower was the opportunity costPart-time job or play baseball – what you give
up is the opportunity cost
How has technology changed the economy?NewspaperRadioTV InternetWhat’s next?
FasterCheaperEasierLess human
involvementGood or bad?
Big C’s Pizza Entrepreneur - MELand – Natural Resources – Wheat, Vegetables,
and MilkLabor – Myself and two other workers – Prep,
Bake, Deliver and Clean-upCapital
Financial Capital - $50,000.00 in loans to start business
Capital Goods Pizza Oven, Trays, Boxes, Tables, Chairs, Pizza
cutters, etc.
Types of EconomiesTraditional
Command
Market
Mixed
TraditionalFamily, group or tribe
controls what is produced and owns the factors of production in common
Money is not an important aspect of this economy
People work because it is the only way goods will be produced
Command EconomyGovernment runGovernment controls
what is producedDictatorshipCommunism
Created for different reasons by societiesControlEquality
Market EconomyFactors of
production – land, labor and capital are owned by individuals
CapitalismFree EnterpriseCompetition is a key
element to a market economy
US – Mixed EconomyPrivate owned businesses
Government run/control
WalmartToppsNapolisChoice
EducationDefensePost OfficeSome forms of Public
TransportationPBSPublic WorksWaste Disposal
US Mixed EconomyRegulations
HealthEnvironmentWagesOvertime paySafetyCivil Rights
Other goods or services that the government should provide?