Economics: Scarcity
and Private Enterprise
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2
Scarcity-The Basic Economic
Problem
• Unlimited wants and needs
• Limited resources
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3
Economic Questions???
What
goods
will be
produced
?
How will
goods be
produced
?
For whom
will they
be
produced
?
3 Basic Economic
Questions
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4
Who Makes the Economic
Decisions?
• Free Economy-individual consumers
• Controlled Economy-government
• Mixed Economy-individual consumers and
the government
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5
America’s Private Enterprise
Economy
• Production resources are
owned and controlled by
individual producers
• Profit motive helps
producers decide what to
produce
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6
America’s Private Enterprise
Economy
•Value-An individual view of the
worth of a product or service.
• Government stays out of
exchange activities between
producers and consumers unless
individuals or society are harmed
by the decisions.
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7
America’s Private Enterprise
Economy (continued)
• Consumers-individuals who purchase
products and services to satisfy needs
– Demand-relationship between the quantity
of a product consumers are willing and
able to purchase and the price.
– Consumers gather information about
available products and services to make
choices.
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8
America’s Private Enterprise
Economy (continued)
Producers-businesses that use their resources to
develop products and services.
– Supply-a relationship
between the quantity of a
product that producers are
willing and able to provide
and the price.
– Producers gather information
about the types of products
and services consumers
want so they can provide
items that will most likely be
purchased.
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9
America’s Private Enterprise
Economy (continued)
• Government
– Ideal circumstances, producers and
consumers interact with no government
interference
– Enacts laws and regulations to help those
who are treated unfairly
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10
Economic Forces
State of the
Economy
International
Relationships
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Election Year
11
Assignments
Independent Practice Assignments
#1 Design a poster illustrating the free market, mixed
and controlled economies. Answer the 3 economic
questions.
#2 Identify profitable inventions; explain how profit
motive is involved when inventing/producing
products
#3 Conduct research to determine marketing opportunities in
China and possible barriers.
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12