SEM I 3.01 Notes
Objective: Explain economics and identify basic economic
resources.
Economics is the study of how to meet the unlimited wants of a society with its
limited resources.
Resources include all things used in producing goods and services.
.
Economic resources are land, labor, and capital that can be used to produce the
needs and wants that people consume.
Land, also known as a natural resource, includes everything contained in the earth or
found in the seas.
Labor, human resources, includes all workers in the economy, including full- and parttime workers, managers, and professional people in both the private and public
sectors.
Capital includes money to start and operate a business, as well as goods used in the
production of other goods. Capital can be limited because they deteriorate through use
or are of poor quality.
For example, ______________ .
Scarcity is a condition in which more goods and services are desired than are
available. Scarcity forces people, businesses and nations to make choices. Unlimited
wants with limited resources results in scarcity.
Economic goods are tangible items.
Examples: CD players or sports equipment
Economic services are intangible.
Examples: going to the circus
Entrepreneurship incorporates the skills of people who are willing to take the risk of
starting their own business.
Entrepreneurs organize economic resources in order to create goods and/or
services needed and desired in an economy.
B. Describe the five economic utilities
.
Utility is an economic term referring to the added value or “usefulness” of a
product.
Five types of economic utility.
Form utility is the value added by changing raw materials or putting parts together to
make them more useful.
Examples: __________
.
Place utility is the value added by having a product where customers can buy it.
Examples: playing a football game at a stadium
Time utility is the value added by having a product at a certain time of year or a
convenient time of day.
Example: __________
.
Possession utility is the value added by exchanging a product for some monetary
value
Example:_____________.
Information utility is the value added by communicating with the consumer.
Example: ______________________________________________________________.
C. Discuss the three basic economic questions and the role of the
government of each system.
The three basic economic questions are:
What ______________________________________should be produced?
_________________________________goods and services be produced?
________________________should the goods and services be produced?
In a market economy, there is ____________________________________________the
three basic economic questions; the market answers them.
Consumers decide what should be___________________________________.
Businesses decide how____________________________________________.
The people who have the money to purchase products___________________________
_____________________________.
.
In a __________________economy, the government answers the three basic economic
questions. The government officials or leaders decide what should be ______________.
The government runs the__________________________________________________.
The government also decides who will________________________________________.
In a traditional economy, the system is based on the
ways________________________. For example, the
__________________________and___________________________.
Mixed economies are ___________________________market systems, nor are they
completely controlled by________________________________________. They are a
mix, or blend, of the two. All economies presently are__________________________.
Capitalism. The people _________________________________________who
represent their constituents’ interests. For example, the United States and Japan.
Socialism. Although most socialist countries are_______________________, the
socialist economy has__________________________________________________.
The government tries to reduce the differences between the____________________.
The socialist model is based on the________________________________________.
Examples: _____________________ ___________________ _________________.
Communism. Communist countries have a government that is run by_______________
___________________________________________. People are assigned jobs.
______________________________are told what type of schooling they will receive.
Examples: _____________________ ___________________ _________________.
.
D. Explain supply and demand.
Supply is ___________________________________________________________and
sell at a ____________________________during a certain period of time. Producers
prefer to supply when the price is________________________; this is known as a
sellers’ market.
Demand is a consumer’s _____________________________________________at a
given price during a certain___________________________________. Consumers
prefer to buy when the price is_____________________; this is known as a
________________________market.
The Law of Supply and Demand is an ________________________________that
states the supply of a good or service will __________________________when demand
is ___________________________and ________________________ when demand
is__________________.
Elasticity is the degree to which demand______________________________________
__________________________________________________________________________.
Example: __________________________________________________________.
Demand__________________________________.
Elastic demand refers to how _________________________________________
_________________________________________________demand for that product.
Example: __________________________________________________________.
Inelastic demand refers to a condition in the market where ____________________
__________________________have very little affect on the ________for that product.
Example: __________________________________________________________.
Factors that affect the elasticity of demand
Availability of substitutes. If a substitute is_____________________________________
______________________________________________________________________.
Example: __________________________________________________________.
Example: __________________________________________________________.
Example: __________________________________________________________.
Brand loyalty. Many customers will only____________________________________.
In general, they will accept________________________________________________.
In this situation,_________________________________________________________.
Example: __________________________________________________________.
Example: __________________________________________________________.
Price relative to income.
When an __________________________________of a good or service does not have a
major __________________________________________, the demand is
usually______________________________.
When an __________________________of a good or service has a major impact on a
customer’s budget, the customer___________________________________________.
In this case, the demand__________________________________________________.
Example: __________________________________________________________.
Example: __________________________________________________________.
Luxury vs. necessity (want vs. need). When a product is a______________________
________________________________. When a product is a luxury, demand is most
likely to be elastic.
Example: __________________________________________________________.
Urgency of purchase. If a purchase must be made immediately, demand tends to be
_________________________.
Example: __________________________________________________________.
E. Phases of a business cycle and the impact of each on the sports and
entertainment industry.
The business cycle is the __________________________________through four
recurring phases –_____________________
__________________________
__________________________ _____________________________________..
Explain the phases of a business cycle.
I.________________________(Peak)
1.____________________________________
2. ____________________________________
3. ____________________________________
4. ____________________________________
5. ____________________________________
II. ____________________________________
1.____________________________________
2. ____________________________________
3. ____________________________________
4. ____________________________________
III. ____________________________________(Trough)
1.____________________________________
2. ____________________________________
3. ____________________________________
4. ____________________________________
IV.__________________________________________
1.____________________________________
2. ____________________________________
3. ____________________________________
4. ____________________________________
5. ________________________________________