Lemonade StandEconomics

Vocabulary:Words to Know

Production• Production is the

creation of goods and services.

“My product is great

tasting lemonade.”

• Manufacturing is to make or produce by hand or machinery, usually on a large scale.

• Manufacturing products, such as cars or pencils, is production.

Goods and ServicesGoods –

physical objects that are produced

Services – Tasks that a person performs

for someone else

Others?

Resources

Human Resources

Skills, training, and abilities people have

to complete tasks that result in production

Nonhuman Resources

Raw materials, tools,

and manufactured products that are

used to make goods and services

Resources are things that are used to create other goods and services.

Human Resources

“Hmm, what resources will I need to create my

lemonade?”

Nonhuman Resources

Profit

Profit is the difference between the money received from selling a product and the cost of producing the product.

Profit = Price - Cost

What is my profit?Costs

Lemons 8 @ .49 each

Sugar 1 lb. @ $1.29Cups .10 each

Price

Sold 20 cups of lemonade at .50 per cup

Scarcity

Scarcity is the situation in which consumer’s

wants are greater than the resources available to satisfy those wants.

“I could have sold 10 more cups of lemonade if

I hadn’t run out of lemons!”

Scarcity• What are some examples

of scarce resources?• How do our choices

determine how scarce resources will be used to produce goods and services?

• How do our choices affect prices of goods and services?

Supply and Demand

Supply is the quantity of a product that producers are willing and able to make available for sale at various prices over a given time period.

“I only had time to make one

gallon of lemonade.”

Supply and DemandDemand is the quantity of a good or service that consumers are willing and able to buy at various prices during a given time period.

“When I lowered the

price and increased the

size, the demand was

greater!”

CompetitionEconomic competition occurs when two or more sellers offer similar goods and services for sale in the marketplace.

“Timmy just opened a lemonade stand one

block away. What will I do to compete?”