ECONOMICS
E C O N O M I C S
Understanding the World Around You
The Benefits of Studying ECONOMICS
Helps You to Decide Who to Vote For in an Election
Helps You to Understand Your Boss’ Thinking
Helps You to Make Money Every Day
Helps You to Understand World News
Helps You Participate in the System
Helps You to Spend Your Money Wisely
But Mostly, It Will Also Help You to Under-stand Business & Mkting and, Therefore, Do Better in This Class
Be Able to Define Economics
The Process of Making Decisions to Satisfy Unlimited Wants & Needs Using Limited Resources OR “Getting the Most for the Least!!!”
What Are Your Economic Decisions?
Should I Get Out of Bed in the Morning?
What Classes Should I Take?
Who Should I Date?
What Type of Car Should I Buy?
What’s For Dinner?
Who Should I Vote For?
What Job Should I Get ?
Important Economic Concepts
Rewards
Costs
Decisions
Benefits (What I Get Out It)
Resources (What I Give Up)
Choices
Be Able to Define Benefits & Economic Resources
What a Decision Will Do For Me: Benefits
Make Me $$$
Relaxation
Joy
Concepts:
LAND
LABOR
CAPITAL
Satisfaction
Confidence
Recognition
QUESTION
How Does a Country Make its Economic Decisions?
Be Able to List the Three Basic Economic Questions Every Country’s Economic System Must Answer
Through the Use of an E c o n o m i c S y s t t e m
What Should We Produce?
How Should We Produce?
Who Gets What We Produce?

Be Able to Identify the Three Primary Economic Systems Used in the World Today
Free Enterprise
Capitalism
Market Economy
Socialism
Democratic Socialism
Communism
Planned Economy
Command Economy
Be Able to Describe the Important Characteristics of Each Type of Economic System
Important Characteristics of All Economic Systems
Allowance for Business Ownership
Production of Consumer Products
The Amount of Competition
The Amount of Employment Available
Private Property Rights
Profit Potential
Social Services Available
Using the Important Characteristics of All Economics Systems, Describe Each Economic System
(See written notes)
Be able two identify two advantages & two disadvantages of each economic system
(See written notes)
What Economic System Do We Use in This Country?
T h e F r e e E n t t e r p r i i s e S y s t t e m
Marketing is Part of Our Economic System
Be able to describe the most important facets of a “Free Enterprise System ”
Freedom of Choice
The Profit Motive
Competition
Open Mkt. (S & D)
Limit Gov. Control
Be able to identify the freedoms generally allowed in a free enterprise system
When to Buy To Compete
When to Sell
To Make Profit
To Own
Freedom to Decide
Be able to describe & graph the open market using the concepts of
“ S u p p l l y & D e m a n d ”
Demand:
The ability & desire of customers to own products
Supply
Products/Services available for sale
Be able to describe what the terms “buyer’s” and “seller’s” market mean

Profit
Income
Cost
Risk
Be able to define the following terms associated with the concept of PROFIT:
Income, Expenses, Costs, Gross Profit, Net Profit, & Risk
- Incentive
- the amount of money a business receives from the sales of its goods/services
- The amount of money a company spends to get product into the store
Expenses - The amount of money a company spends on the operation of the business
Gross Profit - Amount of money made after the cost of goods is subtracted (Income - Cost)
Net Profit - The amount of money made after the cost of goods & expenses are subtracted out
- The “gamble” a business takes that it might lose money instead of making money
Profit is Good, but What Do We Risk?
Our own money
The money of other people (friends, relatives, banks, etc.)
Our time & energy that we could spend on a career
Our hopes/dreams (self esteem, inheritance, freedom, etc.)
Be able to discuss ways a business can increase its profits
Increasing Profits
Increase Sales
Increase Efficiency
Boost Productivity
Raise Prices
Be able to define the types of competition & discuss in a short answer question the advantages to competition in our economy
A rivalry between two or more companies to attract scarce (limited) customer dollars
Market Share - A company’s part of the total market for a product
Direct vs. Indirect
Price vs. Nonprice
No Competition (Monopoly)
Benefits of Competition
New Products & Services
Variety of Products/ Services
Lower Prices
Higher Quality Merchandise
More Information Provided
Etc.
Better Customer Service
In a matching exercise & essay, be able to describe the role of government in a Free Enterprise system
Protect Business Property
Enforce Contracts
Settle Disagreements
Collect & Set Taxes
Provide for Public Welfare
Protect Public Health
Regulate/Stabilize Economy
Conserve the Environment
Protect Consumers
Protect Competition
Regulate the Workplace
Government Services
Military
Police
Fire Protection
Education
Infrastructure
Postal
Libraries
Welfare Services

Anti-Monopoly Regs.
Sherman Anti-Trust Act of 1890
Clayton anti-trust Act of 1914
Federal Trade Commission (FTC)
Worker Protection Rules
Equal Employment Opportunity
Commission
Occupational Safety & Health Admin.
(OSHA)
Minimum Wage Rules
Child Labor Laws
Governmental
Rules & Regulations
Consumer Product Safety Commission
Securities/Exchange Commission (SEC)
Wheeler-Lea Act
Zoning, Licensing, Building Codes
Business Protection Rules
Patents
Copyrights
Trademarks
Consumer Protection
Robinson-Patman Act
Food & Drug Administration FDA
Government Taxes
Progressive Taxes
Income Taxes
Largest income source
Proportional (Flat) Taxes
Levied against individuals & business
Based on salaries/income
Regressive Taxes
Allows for “deductions”
Business collects & sends to the government
Sales Taxes
Levied against sales of goods/services
Varies from state to state
Property Taxes
Levied against the value of most personal property
Levied against individuals & business
Business Taxes
Income (Federal, State, & Local)
Collected by the business
Personal property
Payroll
Social Security
Unemployment
Sales taxes
Corporation taxes
Business licenses
Car/truck licenses
Fees for service

Be able to describe the official measures of an economy’s health or, in other words, “How do we know if the economy is doing well?”
The state of the economy is a major factor in how people vote for public officials
Economic Goals
Low Inflation
1 - 5% is ideal
10% + is painful
Deflation is bad also
Full Employment
96% is full
All 16+ yrs. old & able to work
Productivity
Found by dividing input (of resources) by output ($ value)
Stable Prices
For example, between 1965 &
1985, prices increased 300%; wages did not
Economic Measuring Devices
GNP (GNDP)
Total value of a nation’s products & services in a year:
Goods exported minus imports
Consumer goods
Investment in business
Government purchases
Standard of Living:
Measure of the value of goods & services people have:
Divide GNP by population
For example, if GNP was $4,235,000,000,000 & the population 240 million., the Standard of living would be $17,646
Consumer Price Index
Measures the average price of 400 different normal household products
Also called the “Cost of Living Index”
Unemployment Figures
% of workforce out unemployed
Prosperity
Be able to describe the “economic cycle” and what factors influence its fluctuations
Depression
Lowest Unemployment
Maximum Output
Highest Consumer Spending
Possible Inflation
Prolonged Recession
Lowest Amount of Spending
Highest Unemployment
Production is at its Lowest
Recession
General Slowdown in the Economy
Unemployment Rising
Fewer Good/Services Being Produced
Spending Slows Down
Tax Collection is Down
Possible Deflation
Poverty Occurs
Recovery
Economy Picks Up
Unemployment Decreases
Production Increases
Spending Increases

What would you do if you were a ________ during a ________ business cycle?
Prosperity
Business:
Invests/Expands
Consumers:
Work
Hires More People
Pays More in Taxes
Maintains Max. Inventories
Reaps Profits
Keeps Prices High
Spend, Spend, Spend
Save Some
The Government
Collects Taxes
Keeps Interest Rates High
Recession
Business:
Starts to slow down production
Reduces stock
Cuts back on investments & expansion
Lays off staff
Consumers:
Spend less & save more
Protect their jobs more
The Government
Encourages investment by lowering interest rates
Might spend more to stimulate the economy
Depression
Business
Has massive layoffs or lowers salaries
Stops spending
Eliminates stock (sales) spends their savings
Cuts back on quality
Lowers prices
The Government:
Lowers interest rates more
Offers job programs
Spends more on welfare services
Spends more to stimulate the economy (?)
Cheerleads
Consumers:
Stop Spending
Spend Their Savings
Convert Wealth to Dollars
Loiter
Open Their Own Businesses
Recovery
Business:
Does the opposite of a recession:
Hires
Spends more
Invests
Produces
Risks more
Consumers:
Spend more
Save less
The Government:
Collects more tax money
Raises interest rates
Spends more (?)

Be able to define the terms associated with international trade
International Trade
Imports - Goods & services brought into the country
Exports - Goods & services sent out of the country
Balance of Trade - The difference between a country’s imports & exports
Tariff - A tax put on goods & services brought into a country
Quota - A limit on the number of goods & services that can be brought into a country
Thus Endth the Economics Unit

ECONOMICS
E C O N O M I C S
Understanding the World Around You
The Benefits of Studying ECONOMICS
Helps You to Decide Who to Vote For in an Election
Helps You to Understand Your Boss’ Thinking
Helps You to Make Money Every Day
Helps You to Understand World News
Helps You Participate in the System
Helps You to Spend Your Money Wisely
But Mostly, It Will Also Help You to Under-stand Business & Mkting and, Therefore, Do Better in This Class
Be Able to Define Economics
The Process of Making __________to Satisfy Unlimited Wants & _______ Using Limited ___________ OR
“Getting the ______ for the Least!!!”
What Are Your Economic Decisions?
Should I Get Out of Bed in the Morning?
What Classes Should I Take?
Who Should I Date?
What Type of Car Should I Buy?
What’s For Dinner?
Who Should I Vote For?
What Job Should I Get ?
Important Economic Concepts
Rewards
Costs
Decisions
Benefits (What I Get Out It)
Resources (What I Give Up)
Choices
Be Able to Define Benefits & Economic Resources
What a Decision Will Do For Me: Benefits
Make Me $$$
Relaxation
Joy
Concepts:
LAND
LABOR
CAPITAL
Satisfaction
Confidence
Recognition
QUESTION
How Does a Country Make its Economic Decisions?
Be Able to List the Three Basic Economic Questions Every Country’s Economic System Must Answer
Through the Use of an E c o n o m i c _ _ _ _ _ _ _ _ _ .
What Should We_____________?
__________ Should We Produce?
__________ Gets What We Produce?

Be Able to Identify the Three Primary Economic Systems Used in the World Today
Free Enterprise
Capitalism
Market Economy
Socialism
Democratic Socialism
Communism
__________ Economy
__________ Economy
Be Able to Describe the Important Characteristics of Each Type of Economic System
Important Characteristics of All Economic Systems
Allowance for Business ___________
Production of Consumer Products
The Amount of Competition
The Amount of Employment Available
_________ Property Rights
Profit ___________
Social ___________ Available
Using the Important Characteristics of All Economics Systems, Describe Each Economic System
(See written notes)
Be able two identify two advantages & two disadvantages of each economic system
(See written notes)
What Economic System Do We Use in This Country?
T h e F r e e E n t t e r p r i i s e S y s t t e m
Marketing is Part of Our Economic System
Be able to describe the most important facets of a “Free Enterprise System ”
Freedom of _________
The Profit _________
Competition
Open Mkt. (S & D)
Limit Gov. _________
Be able to identify the freedoms generally allowed in a free enterprise system
When to Buy To Compete
When to Sell
To Make Profit
To Own
Freedom to Decide
Be able to describe & graph the open market using the concepts of
“ S u p p l l y & D e m a n d ”
Demand:
The ability & desire of customers to own ______________________
Supply
Products/Services available for __________
Be able to describe what the terms “buyer’s” and “seller’s” market mean

Profit
Income
Cost
Be able to define the following terms associated with the concept of PROFIT:
Income, Expenses, Costs, Gross Profit, Net Profit, & Risk
- Incentive
- the amount of money a business receives from the _________ of its goods/services
- The amount of money a company __________ to get product into the store
Expenses - The amount of money a company spends on the ___________ of the business
Gross Profit - Amount of money made after the cost of goods is __________ (Income - Cost)
Net Profit - The amount of money made after the cost of goods & __________ are subtracted out
Risk - The “_________ ” a business takes that it might lose money instead of making money
Profit is Good, but What Do We Risk?
Our own money
The money of other people (friends, relatives, banks, etc.)
Our time & energy that we could spend on a career
Our hopes/dreams (self esteem, inheritance, freedom, etc.)
Be able to discuss ways a business can increase its profits
Increasing Profits
Increase Sales
Increase Efficiency
Boost _____________
Raise __________
Be able to define the types of competition & discuss in a short answer question the advantages to competition in our economy
A rivalry between two or more companies to attract scarce (limited) customer __________
Market Share - A company’s part of the total market for a product
Direct vs. Indirect
Price vs. Nonprice
No Competition (Monopoly)
Benefits of Competition
New Products & Services
Variety of Products/ Services
Lower __________
Better Customer Service
Higher Quality Merchandise
More Information Provided
Etc.
In a matching exercise & essay, be able to describe the role of government in a Free Enterprise system
Protect Business _____________
Enforce Contracts
Settle ________________
Collect & Set ____________
Provide for Public Welfare
Protect Public _____________
Regulate/Stabilize the ____________
Conserve the _______________
Protect Consumers
Protect Competition
Regulate the ____________
Government Services
Military
Police
Fire Protection
Education
Infrastructure
Postal
Libraries
Welfare Services

Anti-Monopoly Regs.
_____________ Anti-Trust Act of 1890
Clayton anti-trust Act of 1914
Federal Trade Commission (FTC)
Worker Protection Rules
Equal Employment Opportunity
Commission
Occupational Safety & Health Admin.
(OSHA)
Minimum ___________ Rules
Child __________Laws
Governmental
Rules & Regulations
Consumer Product Safety ______________
Securities/Exchange Commission (SEC)
Wheeler-Lea Act
Zoning, Licensing, Building Codes
Business Protection Rules
Patents
Copyrights
Trademarks
Consumer Protection
Robinson-Patman Act
Food & Drug Administration FDA
Government Taxes
Progressive Taxes
Income Taxes
Largest income source
Proportional (Flat) Taxes
Levied against individuals & business
Based on salaries/income
Regressive Taxes
Allows for “_______________”
Business collects & sends to the
_______________
Sales Taxes
Levied against sales of goods/services
Varies from state to state
Property Taxes
Levied against the value of most personal ______________
Levied against individuals & business
Business Taxes
Income (Federal, State, & Local)
Collected by the business
Personal property
Payroll
Social Security
Unemployment
Sales taxes
Corporation taxes
Business licenses
Car/truck licenses
Fees for service

Be able to describe the official measures of an economy’s health or, in other words, “How do we know if the economy is doing well?”
The state of the economy is a major factor in how people ____________for public officials
Economic Goals
Low Inflation
1 - 5% is ideal
10% + is painful
_________________ is bad also
Full Employment
96% is full
All ______ yrs. old & able to work
Productivity
Found by dividing input (of resources) by output ($ value)
Stable Prices
For example, between 1965 &
1985, prices increased 300%; wages did not
Economic Measuring Devices
GNP (GNDP)
Total ___________ of a nation’s products & services in a year:
Goods exported minus ______________
Consumer goods
_______________ in business
Government _______________
Standard of Living:
Measure of the value of goods & services people have:
Divide GNP by _______________
For example, if GNP was $4,235,000,000,000 & the population 240 million., the Standard of living would be $17,646
Consumer Price Index
Measures the average price of ____________ different normal household products
Also called the “Cost of _____________ Index”
Unemployment Figures
% of workforce out unemployed
Prosperity
Be able to describe the “economic cycle” and what factors influence its fluctuations
Depression
Lowest _______________
Maximum Output
Highest Consumer _____________
Possible Inflation
Prolonged _____________
Lowest Amount of Spending
Highest Unemployment
Production is at its Lowest
Recession
General Slowdown in the Economy
Unemployment ____________
Fewer Good/Services Being Produced
Spending Slows Down
Tax Collection is __________
Possible Deflation
____________ Occurs
Recovery
Economy Picks Up
Unemployment Decreases
Production Increases
Spending _____________

What would you do if you were a ________ during a ________ business cycle?
Prosperity
Business:
Invests/Expands
Consumers:
Work
Hires More People
Pays More in Taxes
Maintains Max. Inventories
Reaps Profits
Keeps Prices High
Spend, Spend, Spend
Save Some
The Government
Collects Taxes
Keeps Interest Rates High
Recession
Business:
Starts to slow down production
Reduces stock
Cuts back on investments & expansion
Lays off staff
Consumers:
Spend less & save more
Protect their jobs more
The Government
Encourages investment by lowering interest rates
Might spend more to stimulate the economy
Depression
Business
Has massive layoffs or lowers salaries
Stops spending
Eliminates stock (sales) spends their savings
Cuts back on quality
Lowers prices
The Government:
Lowers interest rates more
Offers job programs
Spends more on welfare services
Spends more to stimulate the economy (?)
Cheerleads
Consumers:
Stop Spending
Spend Their Savings
Convert Wealth to Dollars
Loiter
Open Their Own Businesses
Recovery
Business:
Does the opposite of a recession:
Hires
Spends more
Invests
Produces
Risks more
Consumers:
Spend more
Save less
The Government:
Collects more tax money
Raises interest rates
Spends more (?)
Be able to define the terms associated with international trade
International Trade
Imports - Goods & ___________ brought into the country
Exports - Goods & services sent out of the country
Balance of Trade - The ______________ between a country’s imports & exports
Tariff - A _________ put on goods & services brought into a country
Quota - A __________ on the number of goods & services that can be brought into a country
Thus Endth the Economics Unit

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