Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Economics of digitization wikipedia , lookup
History of macroeconomic thought wikipedia , lookup
Purchasing power parity wikipedia , lookup
Production for use wikipedia , lookup
Public good wikipedia , lookup
Macroeconomics wikipedia , lookup
Supply and demand wikipedia , lookup
Chapter 1 What is the difference between a good and a service? Good: tangible Service: intangible What are some consumer goods/services? What are some business goods/services? Largest producer of goods and services in the world? United States Impact of consumer spending: More jobs More money flow Increased standard of living (What does this mean?) Impact of increased consumption: Pollution Conservation Managing waste **US produces more garbage per person per year than the residents of any other country Economic Resources: resources utilized to create goods and services AKA: Factors of Production Three types: Natural Human Capital Natural: raw materials supplied by nature Human: people who produce goods and services AKA: Labor Ex: Entrepreneur: take risk of using resources to start new product Capital: products and money used to create goods and services Money = Capital Resources: Limited limited or unlimited? Scarcity: unlimited wants, limited resources AKA: Basic Economic Problem Everyone is affected Scarcity requires us all to make difficult decisions Example… Economic Decision-Making: choosing which wants, among several, are to be satisfied What occurs when you must make a decision: Trade-Off: Giving up one thing in order to have another Example… Opportunity Cost: Weighing the options and looking at what is being given up when a decision is made Example… Steps to DMP: Define the problem Identify choices Evaluate choices Choose Act Review Economic Questions: What goods and services will be produced? How will the goods and services be produced? What needs and wants will be satisfied with the goods and services produced? **For whom will the goods and services be produced? What goods and services will be produced? Resources readily available Resources that are limited Climate Focus of country Find balance in needs and wants of country How will the goods and services be produced? Best use of resources Change in trends (ex: agriculture to industry) Labor needs What needs and wants will be satisfied? Also answers the “For Whom?” question Must determine what is most critical Developed budget Economic System: the method by which a country answers the previous questions Types of Systems: Command Market Traditional Mixed Command: AKA: directed, planned Resources: owned and controlled by government Government makes all decisions Personal economic choices are limited Market: AKA: capitalistic Resources: owned and controlled by the people Questions answered through consumer activity Marketplace: where goods and services exchange hands Dollar votes: when you build demand for a product by making a purchase Traditional: AKA: Custom-based Goods and services are created based on what has always been done Questions are answered based on skills and available resources Found in lessdeveloped questions Looking to meet basic needs of the people Mixed: Contains characteristics of all other systems No pure systems exist More economies are moving from command to market Former Soviet Union China US Economic System Capitalism: private ownership of resources Economic freedoms: Free/private enterprise: freedom to open business Private property: buy/dispose of personal items Freedom of choice: spend money when/where you want Voluntary exchange: giving something of value (usually money) in order to receive something of value Profit: money left after bills are paid Profit motive: working hard to make more money Competition: two people/groups going after same goal Consumers: Person who buys and uses goods and services Can be: Individual Business Government Create demand Producers: People/organizations that determine what goods and services will be available Make decisions based on demand Demand: Quantity of goods and services consumers are willing and able to purchase at a particular price Direct impact on prices Demand curve: shows the relationship between price and quantity demanded Supply: Quantity of goods and services businesses are willing and able to provide at a particular price Direct impact on price Supply curve: relationship between price and quantity supplied Demand Increase in demand = higher prices Decrease in demand = lower prices Supply impact on price: Increase in supply = lower prices Decrease in supply = higher prices Other impact on price: factors to influence price: Competition Quality of materials used Unexpected events Market price: point where supply and demand equal (AKA: equilibrium point)