Economics
Economics Defined
 Economy:
the organized way a nation provides
for the needs and wants of it’s people
 Economics:
the management of the
production, distribution and consumption of
goods and services

meeting unlimited wants with limited resources
Economic Activities
1.
Production: Make It!
2.
Consumption: Use It!
3.
Exchange: Trade It!
4.
Distribution: Give It Out!
Economic Resources
 Human
Resources (entrepreneurship)
 Natural
Resources
 Capital
Resources
Human Resources
 People
 Examples:




Full-time
Part-time
Seasonal
temp
 There
may be a shortage of workers for a certain
job or profession:


People lack training or skills needed
People are not interested in filling certain jobs
Natural Resources
 Resources
found in nature that can be used to
produce goods or services
 Examples:





Wildlife
Plant life
Weather conditions
Minerals
Natural gas
 Natural
resources become economic resources
when used in production of goods and services
 Used
Capital Resources
to produce a finished product
 Reflects
society
the state of technology that exists in
 Examples:





Machinery
Buildings
Transportation
Furniture,
Computer equipment (technology)
Economic Resources
RESOURCES
Why is resource limited?
HUMAN
Must be willing and
able, lack of training
NATURAL
Earth is finite, pollution,
wrong season, drought
CAPITAL
Break (need repair),
don’t last, poor quality
Human Resources
Affect on Business
 How
do employers deal with a shortage of
workers for a certain job or profession?

Offer higher wages

Offer training and retraining

Increase promotions/incentives

Increase technology
Natural Resources
Affect on Business
 All
natural resources are limited
 Some
of the earth’s resources are difficult and
costly to obtain
 Not
all countries have the ability to tap into all
of their natural resources (lack technology and
equipment)
 When
natural resources are limited, prices go
up on products that require these resources
(gas)
Capital Goods
Affect on Business
 Companies
try to maintain the capital goods
they already have to minimize cost
 Companies
look for alternative capital goods to
increase profit and get an edge of competitors
 They
modify current technology to become
more efficient
Three Economic Questions
 What
countries ask themselves when
considering economic decisions
1.
What product or services to produce?
2.
How to produce those products and services?
3.
For whom to produce the products and
services?
Goods and Services
 Goods:

Tangible
Can touch item
 Services:

Intangible
Cannot touch item
Needs vs. Wants
 Needs:

Water, clothing, food
 Wants:

something you have to have (required)
something you would like to have (desire)
Designer clothes, sports car
Economic Wants
 Non-economic

Love, winning, good grades
 Economic

Wants:
Wants:
Material items, food
Scarcity
 The
difference between what consumers
want and need and what the available
resources are.
Unlimited Wants
MINUS
Limited Resources
EQUALS
Scarcity
Economic Choices
 Trade
off: Having to make a choice between two
or more things
Trade Off
Option A
or
Option B
Opportunity
Cost
 Opportunity
Cost: Everything you gave up by
making that choice
Activity
 Students
will complete a short activity
containing 7 process questions
 Students
activity
may use class notes to complete this