Economics

Economics Defined Economy: the organized way a nation

provides for the needs and wants of it’s people

Economics: the management of the production, distribution and consumption of goods and services meeting unlimited wants with limited resources

Economic Activities1. Production: Make It!

2. Consumption: Use It!

3. Exchange: Trade It!

4. Distribution: Give It Out!

Economic Resources

Human Resources (entrepreneurship)

Natural Resources

Capital Resources

Human Resources People

Examples: Full-time Part-time Seasonal temp

There may be a shortage of workers for a certain job or profession: People lack training or skills needed People are not interested in filling certain jobs

Natural Resources Resources found in nature that can be used to

produce goods or services

Examples: Wildlife Plant life Weather conditions Minerals Natural gas

Natural resources become economic resources when used in production of goods and services

Capital Resources Used to produce a finished product

Reflects the state of technology that exists in society

Examples: Machinery Buildings Transportation Furniture, Computer equipment (technology)

Economic ResourcesR

ES

OU

RC

ES HUMANHUMAN

NATURALNATURAL

CAPITALCAPITAL

Why is resource limited?Why is resource limited?

Must be willing and able, lack of training

Earth is finite, pollution, wrong season, drought

Break (need repair), don’t last, poor quality

Human Resources Affect on Business

How do employers deal with a shortage of workers for a certain job or profession?

Offer higher wages

Offer training and retraining

Increase promotions/incentives

Increase technology

Natural Resources Affect on Business

All natural resources are limited

Some of the earth’s resources are difficult and costly to obtain

Not all countries have the ability to tap into all of their natural resources (lack technology and equipment)

When natural resources are limited, prices go up on products that require these resources (gas)

Capital Goods Affect on Business

Companies try to maintain the capital goods they already have to minimize cost

Companies look for alternative capital goods to increase profit and get an edge of competitors

They modify current technology to become more efficient

Three Economic Questions

What countries ask themselves when considering economic decisions

1. What product or services to produce?

2. How to produce those products and services?

3. For whom to produce the products and services?

Goods and Services Goods: Tangible

Can touch item

Services: Intangible Cannot touch item

Needs vs. Wants Needs: something you have to have (required)

Water, clothing, food

Wants: something you would like to have (desire) Designer clothes, sports car

Economic Wants Non-economic Wants:

Love, winning, good grades

Economic Wants: Material items, food

Scarcity The difference between what consumers

want and need and what the available resources are.

Unlimited Wants MINUS

Limited Resources EQUALS Scarcity

Economic Choices Trade off: Having to make a choice between

two or more things

Opportunity Cost: Everything you gave up by making that choice

Trade Off

Option A Option Bor

Opportunity Cost

Activity Students will complete a short activity

containing 7 process questions

Students may use class notes to complete this activity