Download Unit 1 Needs and Wants

Unit 1 Needs and Wants
• Supply and Demand
• Effects on the Economy
Vocabulary
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Need
Want
Goods
Service
Resource
Scarcity
Factors of production
Economics
Equilibrium price
Types of economies
• Inflation
• Deflation
• Recession
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Depression
GDP
Deficit
Debt
Surplus
Business cycle
Ethics
Sweatshops
OSHA
Social Responsibility
FDA
Equal Pay Act
EPA
What is a Need and a Want?
http://itp.nyu.edu/~alo244/what_do_need_and_want.jpg
Four Factors of Production
/Resources
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Natural resources
Human resources
Capital resources
Entrepreneurial resources
Scarcity • Do you believe that the world is likely to
run out of oil?
• 2. If we're really not running out of oil,
why do so many media reports
encourage people to believe we are?
Quiz?
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What is the meaning of scarcity
Name a scarce resource
What is a natural resource
What is a human resource
Define Economics
The study of how society chooses to
use resources to produce and distribute
goods and services for people’s
consumption.
The basis of business is also the
study of economics. Businesses
look at people’s wants and needs
and then decide whether to
supply the demand.
Supply and Demand in a Market
system
Supply is controlled by the business
Demand is generated by the consumer
http://www.nonstopmac.com/images/ipod-touch.jpg
http://www.synthtopia.com/content/wp-content/uploads/2007/04/flash-mob.jpg
Demand curve is based on price.
The higher the price the
Lower the amount demanded.
20
Price
Demand Curve
Equilibrium Price
Supply Curve
10
100
1,000
Quantity Purchased
Types of Economics Systems
• Command Economy
– Communism
• Socialism
• Market Economy
• Mixed Economy
Economies
• Command - Government controlled
• 1.Strong – communism – government
makes all economic decisions
• 2. Moderate – socialism – some private
business – some government controlled
• Free Market - Capitalism, resources are
privately held.
• Mixed – most countries fall under this.
Partial use of both free and command.
• Will we ever go back to living like
this?
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Economic Indicators
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GDP
Unemployment
Housing
Rate of Inflation
National Debt
GNP or GDP
• Both of these indicators reflect the sum
of goods and services.
• GNP - includes profit by businesses
operating outside the country- Nike in
South America
• GDP- includes business done by foreign
countries inside our borders- Nissan
Titan
Five Factors that affect GDP
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Population
Entrepreneurialism
Trade
War
Natural resources
Turn to your neighbor and
give them one reason why
each of the indicators would
be good for the economy.
Have your neighbor tell you
one reason why that indicator
is bad or brings the economy
down.
Business Cycle
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Prosperity
Recession
Depression
Recovery
• **Book page 40***
Business Ethics and Social
Responsibility
Goal of Business is to make a
profit.
• Profits before social welfare?
• When a business is tempted to put profits
before social welfare there is a conflict of
interest
What is Business Ethics?
• Businesses have an ethical obligation to
provide safe product, create jobs, protect the
environment, and contribute to the standard
of living.
People Factor
Human Relations
•Hiring
•Firing
•Unions
•Diversity
Law Factor
Govern Regulations
•Working within the law
•Operating a business w/
others fairly
Business Ethics
Land Factor
Environmental
•Pollution control
•Recycling
Society Factor
Community Involvement
•Giving to the community
•Sponsoring events
For any business to be successful,
it must operate legally and
humanely.
List under headings companies which act
responsibly and/or ethically and those who do not.
• Shirtwaist Factory, New York City
• Sweatshops good or bad?
• Levi Strauss
• Johnson & Johnson 1982 – Tylenol recall
$100 mill
• Ford/Firestone 1999 – Jeep recall
• Post – Contributes a percentage of purchase
to the Boys and Girls Club of America
• GM – 30% reduction of waste
Boycotts
• How do boycotts affect supply and demand?
• Do boycotts help or hurt?
Ways to use ethics in business
• Quality product at a fair price
– Repeat customers – good reputation
• Follow government regulations
– If not – Jail or fines
• Employee relations
– Less dissatisfaction - less turn-over of skilled
labor
Government aids for social
responsibility
• FDA – protects consumers from dangerous
or falsely advertised products.
• Equal Pay Act – men and women should be
paid the same for doing equal work.
• EPA – protects environment and controls
pollution
• OSHA –protects employees from unsafe
work environments.