CHAPTER 1

OUR ECONOMIC DECISIONS

NEEDS AND WANTS

• NEEDS--BASIC TO SURVIVAL

• WANTS--ADD TO THE QUALITY OF LIFE

• UNLIMITED WANTS--NEVER END

GOODS AND SERVICES

• GOODS--THINGS YOU CAN SEE AND TOUCH

• SERVICES--NEEDS AND WANTS SATISFIED BY EFFORTS OF OTHER PEOPLE

ECONOMIC RESOURCESFACTORS OF PRODUCTIONNATURAL RESOURCES--RAW

MATERIALSHUMAN RESOURCES--PEOPLE WHO

WORK TO PRODUCE GOODS AND SERVICES (LABOR)

CAPITAL RESOURCES--TOOLS, EQUIPMENT, AND BUILDINGS

ENTREPRENEURSHIP-CASH AND IDEAS

LIMITED RESOURCES

SCARCITY--BASIC ECONOMIC PROBLEM

UNLIMTED WANTS AND LIMITED RESOURCES!!!!!!

SCARCITY AFFECTS INDIVIDUALS, BUSINESSES, AND THE GOVERNMENT

ECONOMIC CHOICES

NEED TO CHOOSE WHAT YOU WANT AND NEED; AND WHAT YOU CAN AFFORD!!

DECISIONS, DECISISONS, DECISIONS...

DECISION MAKING PROCESS

1. DEFINE THE PROBLEM(DECISION)2. IDENTIFY THE CHOICES3. EVALUATE THE ADVANTAGES AND

DISADVANTAGES4. CHOOSE5. ACT ON YOUR CHOICE6. REVIEW YOUR DECISION

FYI

• WHAT DO STUDENTS WANT OUT OF LIFE? ACADEMIC SUCCESS?

• MORE PEOPLE WORK IN SERVICE JOBS• CAPITAL GOODS ARE IMPORTANT

BECAUSE THEY HELP PRODUCE EFFICIENTLY AND CHEAPLY

• ORDERLY APPROACH TO DECISION MAKING IS MORE EFFECTIVE

CRITICAL THINKING

• ENVIRONMENTAL PERSPECTIVES; SEE PAGE 11.

• DECISION MAKING ACTIVITY

BADLANDSWorkin’ in the fields

‘Till you get your back burnedWorkin ’neath the wheel

‘Till you get your facts learnedBaby I got my facts

Learned real good right nowPoor man wanna be richRich man wanna be kingAnd a king ain’t satisfied‘Till he rules everythingI wanna go out tonight

I wanna find out what I got