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Introduction to Business© Thomson South-Western
ChapterChapterChapterChapter
Economic Decisions and Systems
1-11-1 Satisfying Needs and Wants
1-21-2 Economic Choices
1-31-3 Economic Systems
1-41-4 Supply and Demand
11
Introduction to Business© Thomson South-Western
Chapter 1
Slide 2
LESSON 1-1LESSON 1-1
Satisfying Needs and Wants
Goals Explain the difference between needs
and wants. Distinguish between goods and
services. Describe the types of economic
resources.
Introduction to Business© Thomson South-Western
Chapter 1
Slide 3
Key Terms
needs wants goods services economic resources
Introduction to Business© Thomson South-Western
Chapter 1
Slide 4
NEEDS AND WANTS
Needs are essential Wants add to the quality of life Needs and wants are unlimited
Introduction to Business© Thomson South-Western
Chapter 1
Slide 5
>> C H E C K P O I N T
What is the difference between a need and a want?
Introduction to Business© Thomson South-Western
Chapter 1
Slide 6
GOODS AND SERVICES
Goods and services for businesses and consumers
The U.S. economy
Introduction to Business© Thomson South-Western
Chapter 1
Slide 7
>> C H E C K P O I N T
How do people satisfy their wants and needs?
Introduction to Business© Thomson South-Western
Chapter 1
Slide 8
ECONOMIC RESOURCES
Natural resources Human resources Capital resources Resources are limited
Introduction to Business© Thomson South-Western
Chapter 1
Slide 9
>> C H E C K P O I N T
What are the three types of economic resources? Give an example of each type of resource.
Introduction to Business© Thomson South-Western
Chapter 1
Slide 10
LESSON 1-2LESSON 1-2
Economic Choices
Goals Understand the basic economic
problem. Explain the steps in the decision-
making process.
Introduction to Business© Thomson South-Western
Chapter 1
Slide 11
Key Terms
scarcity economic decision-making tradeoff opportunity cost
Introduction to Business© Thomson South-Western
Chapter 1
Slide 12
THE BASIC ECONOMIC PROBLEM Choices Tradeoffs and opportunity costs
Introduction to Business© Thomson South-Western
Chapter 1
Slide 13
>> C H E C K P O I N T
What is opportunity cost?
Introduction to Business© Thomson South-Western
Chapter 1
Slide 14
THE DECISION-MAKING PROCESS1. Define the problem.
2. Identify the choices.
3. Evaluate the advantages and disadvantages of each choice.
4. Choose one.
5. Act on your choice.
6. Review your decision.
Introduction to Business© Thomson South-Western
Chapter 1
Slide 15
>> C H E C K P O I N T
What are the six steps in the decision-making process?
Introduction to Business© Thomson South-Western
Chapter 1
Slide 16
LESSON 1-3LESSON 1-3
Economic Systems
Goals Identify the three economic questions. Differentiate among the main types of
economic systems. Describe the economic system of the
United States.
Introduction to Business© Thomson South-Western
Chapter 1
Slide 17
Key Terms
economic system command economy market economy traditional economy mixed economy capitalism
Introduction to Business© Thomson South-Western
Chapter 1
Slide 18
THE THREE ECONOMIC QUESTIONS What to produce? How to produce? What needs and wants to satisfy?
Introduction to Business© Thomson South-Western
Chapter 1
Slide 19
>> C H E C K P O I N T
What are the three economic questions?
Introduction to Business© Thomson South-Western
Chapter 1
Slide 20
TYPES OF ECONOMIC SYSTEMS Command economy Market economy Traditional economy Mixed economies
Introduction to Business© Thomson South-Western
Chapter 1
Slide 21
>> C H E C K P O I N T
What are the main differences among the three economic systems?
Introduction to Business© Thomson South-Western
Chapter 1
Slide 22
THE U.S. ECONOMIC SYSTEM Private property Freedom of choice Profit Competition
Introduction to Business© Thomson South-Western
Chapter 1
Slide 23
>> C H E C K P O I N T
Name the four principles of the U.S. economic system.
Introduction to Business© Thomson South-Western
Chapter 1
Slide 24
LESSON 1-4LESSON 1-4
Supply and Demand
Goals Describe supply and demand orally and
with graphs. Discuss how supply and demand affect
prices of products and services.
Introduction to Business© Thomson South-Western
Chapter 1
Slide 25
Key Terms
consumer producers demand supply market price
Introduction to Business© Thomson South-Western
Chapter 1
Slide 26
PARTICIPATING IN A MARKET ECONOMY Consumers set demand Producers establish supply A graphic view
Introduction to Business© Thomson South-Western
Chapter 1
Slide 27
DEMAND AND SUPPLY
Introduction to Business© Thomson South-Western
Chapter 1
Slide 28
>> C H E C K P O I N T
How does the price of a product affect demand and supply?
Introduction to Business© Thomson South-Western
Chapter 1
Slide 29
DETERMINING PRICE
Factors influencing demand Factors influencing supply Determining market price
Introduction to Business© Thomson South-Western
Chapter 1
Slide 30
MARKET PRICE
Introduction to Business© Thomson South-Western
Chapter 1
Slide 31
>> C H E C K P O I N T
How is the market price for a product determined?