Understand
responsible earning
and spending
4 basic economic
activities of consumers




Earning
Spending
Saving
Borrowing
Student activitiy earning
 When was the last time you did
something to earn money?
 How did you earn it?
 How did this make you feel?
Student Activity spending
 How do you decide on what to spend
your money?
Student activity - saving
 What was the last thing for which you
decided to save money?
 How do you ‘make yourself’ save?
Student activity borrowing
 When was the last time you decided to
borrow money or something else?
 How did things turn out?
 What are your views on borrowing and
lending?
Earning
 Gaining money by working, owning a
business, or receiving investment returns.
 Money gained from earning is called
earnings
3 activities that affect
earning
 Career choices – type of career/job and place
of employment
 Ability to find employment – education level;
employability skills; prior job performance;
economic conditions; workplace trends and
opportunities
 Ability to advance – type of career/job;
education level; job performance; economic
conditions; workplace trends and opportunities
Responsible earning
 Involves realizing that career choices
greatly affect lifetime earnings and
standard of living and considering these
factors when making career choices
SPENDING
Using money to purchase goods and
services.
The way a person spends money
determines the value received and
influences the economy.
Each purchase contributes to the demand
for the product or service purchased.
Law of Scarcity
An economic system cannot produce all
goods and services that consumers want,
and most consumers do not have the
resources to purchase everything they
want. Choices must be made about how
limited resources (time, money) are used.
Basic Economic Problem
We have UNLIMITED WANTS but have
LIMITED RESOURCES
Trade Offs & Opportunity
Cost
When making a choice, other alternatives
must be sacrificed. The highest-valued
alternative that must be given up when a
choice is made is the OPPORTUNITY
COST of the choice. The choice of one
item while giving up another is called
TRADE OFF.
Responsible spending
Includes researching and planning
purchases in advance and making wise
choices in light of opportunity costs and
trade offs that apply