Economics
The study of how goods and services are produced, distributed
and consumed.
Economy
• A system for producing, distributing and consuming
goods and services.
Market
• A place or service that allows buyers and sellers to
exchange goods and services
Types of Businesses
Goods and Services
• Goods: products
• Services: things people do for other people
Producers and Consumers
• Producers: make the goods and services
• Consumers: buy the goods and services
First steps…
• http://www.wikihow.com/Start-a-Small-Business
Supply and Demand
• Demand- the quantity of a good or service that
consumers are willing and able to buy at a given
price during a specific period of time (how much
people want it)
• Supply- the quantity of a good or service available
Supply and Demand Graph
Scarcity
Surplus
Economic Decisions
Traditional Economy
• Based on custom and traditions.
• Decisions are made by the family,
individual, or community.
• Transactions are usually trade and barter for exchange.
• Less consumption by consumers, need based products.
For example, many poor parts of Southern Mexico,
South America, and Africa still grown their own food,
build their own shelters, and hunt and gather.
Market Economy
AKA: Capitalism or Free Enterprise
• Businesses are privately owned and run to earn
profits.
• Decisions are made by producers and consumers not
the government.
• Some forms of mixed economies give the
government some control in the
market to protect consumers and
producers from unethical decisions.
Command Economy
• Government makes the decisions about what is
made and what prices are charged
• Communism and socialism are two economies
controlled by the government
Socialism and Communism
• Socialism: the government runs some industries,
such as oil, and uses profits to pay for things like
healthcare or education. Ex. Venezuela
• Communism: the government runs ALL industries,
owns ALL property, set wages and prices and people
must do as they are told. Ex. North Korea
Communism v. Capitalism
• Capitalist say that people have no reason to do a
good job in communism because everyone gets the
same pay and products are boring and poorly made
• Communists say that capitalism is unfair to the poor
because people at the top of the company get rich
while workers get low wages. They also say
capitalists wipe out little companies and destroy the
environment to get money.
Agriculture Industries
Wholesale Industries
It is the sale of goods to anyone other than
the standard consumer, examples are
retailers, or other businesses for
distribution.
Retail Industries
• The sale of goods and services to the consumer or
end user.
Manufacturing Industries
Manufacturing is the production of goods for use
or sale using labor and machines, tools, chemical
and biological processing, or formulation.
Service Industries
A business that does work for a customer
Entrepreneurship
Four Factors of Production
• Natural Resources, Labor, Capital, and
Entrepreneurs
Resources