Chapter 1Wants and Needs

Wants & Needs What is the difference b/w what you want and

what you need. You make business decision ever day

Buying snack, buying lunch, going to a movie All of these transactions are a business

decision

“Wants” Wants are anything you wish you could have. Each person has wants and each person’s are

different Car vs. Tuck, mountain bike vs. off-road bike,

A group of people may also share the same wants. Families wanting new car, business new computer system

All these types of wants are considered private.

“Wants” Some wants are widely shared by many

people These wants are no longer considered private

but public wants Things like highways, drinking water, and

education Federal, State, and Local governments satisfy

public wants The role of wants drive our economy

“Wants” Businesses take these wants and provide

either a product or a service

“Needs” Necessary wants are what is known as Needs

Food, Shelter, Clothing are basic needs Many business respond to consumer needs by

providing goods and services at reasonable prices

Goods Goods can by physically weighed or

measured Bicycles and skates are goods, as are

groceries and telephones Goods satisfy your wants and needs for

material things that you can see or touch

Services Services are tasks that people or machines

perform Services also satisfy some of your wants for

things you cannot see or touch. Mechanics, Lawn care, cutting hair

Unlimited Wants, Limited Resources Most people have unlimited wants for goods

and services. The more money you make the more you want

However few have enough resources to satisfy all of their wants

Resources Resources are anything that people can use to make or

obtain what they need or want Exp: Fuel, timber, labor, and money

The problem of unlimited wants and limited resources affects individuals, companies, and nations.

Resources limit the number or wants people can satisfy. Example you want a new pair of jeans and a new camera

but only have money for one of them

Resources Businesses and governments are influenced

by the same problem They lack the resources to do all the things

that they want to do.

Resources People make the most of their resources by

making the right choices about what to buy. The decision-making process is a step by step

method to carefully consider alternatives that result in better choices.

Decision-making Process Step 1: Identify the problem

Occurs daily or comes up only a few times Step 2: List the alternatives

Take the time to com up with a good range of alternatives Step 3: Determine the pros and cons Step 4: Make the best decision

Rank the alternatives according to the pros and cons Step 5: Evaluate your decision

Ask yourself if you made the correct decision

Decision-making Process You may not use all of the steps of the

process every time you buy something. Example buying orange juice or a new car.

Business Whether you are deciding what movie to see

or what bike to buy your wants and needs are usually satisfied by businesses

A business is any activity that seeks profit by providing goods or services to others.

Business provide you with necessities such as food, clothing, housing, and medical

They can also provide non-necessities

Business Businesses also provide people with the

opportunity to become wealthy Exp: Sam Walton opened Wal-Mart in 1962 in

Arkansas and now sells about $200 billion worth of goods

Business Activities Business will market the products or service by

deciding where to sell it and how to advertise it. But first they have test to make sure enough people

will buy the product or service. Exp: taste tests

A business will go through a sequence of activities when developing a new or improved product or service

Business Activities Determine opportunities for products or

services Evaluate the demand for the product or

service. Will enough people buy or use it for that price

Obtain funding A business will need both start up money and

operating capital

Business Activities Set up and manages all factors for producing

the good or service Equipment, buildings, and raw materials

Produces the good or service Markets to ensure consumers know of the

good or service Keep records to satisfy government

requirements, improve production and sales

Business Motivations Why would a business or person supply the

good or service Profit is the amount of money left over after a

business has paid for the cost of producing its goods and services.

Profit is the motivation of taking the risk to start a business.

Without it the business can not survive.

Business Motivations Businesses are profitable when sales are high and

costs are kept low. When consumer’s wants and needs change then the

businesses are motivated to change along with them. Companies are also motivated by competition. Competition is the contest b/w businesses to win

customers. Exp: Verizon, Motorola, Sprint

Businesses & You Business make decisions that impact you They decided what products and services to

produce However you also affect businesses You decided what kind or products and

services you want This is how businesses know what products

or services to produce

Consumer A consumer is a person who selects

purchases, uses, or disposes of goods or services

Businesses are aware of you changing needs and wants

They have to keep marketing to be able to understand and change anything to keep up with these needs and wants

You as a Wage Earner Businesses also affect you as a wage earner Businesses have to pay someone to produce

the products and services This is where they hire individuals to perform

the work How do businesses know how many to hire?

Homework Homework due on Thur. Pg 14-15 #1-24