Download Economic Decisions and Systems

Essential Standard 5.00
Understand fundamental economic
concepts to obtain a foundation for
employment in business.
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Objective 5.01
Understand & Distinguish between
economic goods and services
Explain the concept of economic
resources
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Topics
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Satisfying needs and wants
Basic economic problem
Main types for economic systems
Market economy self-regulating principles
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Satisfying Needs and Wants
4
Satisfying Needs and Wants
• What are needs?
• What are wants?
5
Satisfying Needs and Wants
continued
• What are goods?
• What are services?
• The United States economy is the largest
producer of goods and services in the
world.
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Satisfying Needs and Wants
continued
• How do businesses use economic
resources to produce goods and
services?
• The types of economic resources are:
– Natural
– Human
– Capital
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Satisfying Needs and Wants
continued
• What are natural
resources?
• What are human
resources?
Many natural resources
are nonrenewable.
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Satisfying Needs and Wants
continued
What are capital resources?
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Satisfying Needs and Wants
continued
• What is the basic economic problem?
• What is scarcity?
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Satisfying Needs and Wants continued
• What is the purpose of economic
decision-making?
• What happens to choices in a tradeoff?
• What is opportunity cost ?
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Main types of
economic systems
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Economic Systems
What are the three economic questions that
all economies must answer?
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Economic Systems
• What is an economic system?
• The main types of economic systems are:
– Command or Communist
– Market
– Traditional
– Mixed
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Economic Systems
• Who owns the resources in the main types of
economic systems?
– Command
– Centered on family
– Market
– Government
– Traditional
– The people
• Who answers the economic questions?
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Market economy
self-regulating principles
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United States Economic System
• What is capitalism?
• What type of economic system does the
United States have?
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United States Economic System
continued
The four principles of U.S. economic system
are:
• Private property
• Freedom of choice
• Profit
• Competition
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Market Economy
• What is the role of consumers in a market
economy?
• A consumer includes individuals,
businesses, and government.
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Market Economy continued
What is the role of producers in a market
economy?
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Market Economy continued
The market economy is based on the
principles of supply and demand.
– What is demand?
– What are some examples of consumer
demand?
– What is supply?
– What are some examples of how producers
establish supply?
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Supply and Demand Graphs
Intro to Business, 6e, Thomson South-Western
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Supply and Demand Graphs
Intro to Business, 6e, Thomson South-Western
23
Supply and Demand Graphs
Market (equilibrium) price is the point
where supply and demand are equal.
Intro to Business, 6e, Thomson South-Western
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