Course
Essential
Standard
Objective
Essential
Questions
8721 Principles of
Business and Finance
1.00
Unit A
Principles of Business
Understand the role of
business in the global
economy.
1.01
Understand economic
systems.
 How do businesses satisfy needs and wants?
 What are the six steps necessary for making choices?
 What is the relationship between who answers economic
questions and the type of economic system that exists in a
country?
 What are the self-regulating principles of a market economy?
I. Economics is the study of the decisions made for production, distribution, and
consumption of goods and services to satisfy needs and wants. To satisfy needs
and wants businesses use economic resources to produce, distribute, and sell
goods and services. The types of economic resources are:
A. Capital
B. Human
C. Natural
II. The six steps of economic decision-making process are:
A. Defining the problem
B. Identifying choices
C. Evaluating the advantages and disadvantages of each choice
D. Choosing one choice
E. Acting on the choice
F. Reviewing the decision
III. The involvement of a nation’s government in answering economic questions
determines its economic system. The economic questions address the allocation of
scarce resources.
A. The three economic questions are:
1. What to produce?
2. How to produce?
3. For whom to produce?
B. The main types of economic systems and who decides on the economic
questions are:
1. Command (Communist) Economy’s government decides.
2. Market Economy’s people determine.
3. Traditional Economy questions are carried out the same way.
4. Mixed Economy takes on fundamentals of command and market
economies.
C. The four principles that The United States economic system is based on are:
which are:
1. Competition
2. Freedom of Choice
3. Private Property
4. Profit
IV. Individuals, businesses, and government make buying decisions in a market
economy. These buying decisions make a market economy self-regulating. The selfregulating principles of a market economy are:
A. Consumers set demand.
B. Producers establish supply.
C. Supply and demand generate competition.
D. Demand and supply factors influence market (equilibrium) prices.
Name: ______________________
Class: _______
Date: _______
Satisfying Needs and Wants Organizer
Directions: Describe in your own words the listed items.
Needs
Wants
Goods
Services
Economic resources
Natural
Examples
Human
Examples
Capital
Examples
The Basic Economic Problem
What is the relationship between scarcity and the basic economic problem?
Satisfying Needs and Wants Organizer Continued
Economic Decision-Making Process
What is the purpose of the decision-making process?
______________________________________________________________________
______________________________________________________________________
What happens to choices in a tradeoff?
______________________________________________________________________
______________________________________________________________________
What is opportunity cost?
______________________________________________________________________
______________________________________________________________________
In column one, provide the six steps of the economic decision-making process. In
column two, apply the steps and complete an economic decision such as purchasing
new equipment, shopping for a gift, or paying for a trip.
Name: ______________________
Class: _______
Date: _______
Economic Resources Activity
Directions: Use the listed or other resources to classify how economic resources are
used to satisfy needs and wants.
Some North Carolina Resources:
Bank of America Stadium
Christmas Trees
NC Legislators
Sweet potatoes
Brier Creek Apartments
Therapists
Table of Resources and Uses
NC resource
Type of resource Does this
resource satisfy
needs or wants
How will this resource
satisfy needs or wants for a
business?
Honey
Natural
Answers will vary.
Answers will vary.
Wants
A business could sale 12 oz
jars of honey at a roadside
stand.
Name: ______________________
Class: _______
Date: _______
Economic Systems Organizer
Directions: Provide responses for the listed items.
What are the three economic questions that economic systems must answer?
1. ________________________________________________________________
2. ________________________________________________________________
3. ________________________________________________________________
Main Economic Systems
Features
Command
Economy
Who owns the
resources?
Who answers the
three economic
questions?
Market Economy
Traditional Economy
Name: ______________________
Class: _______
Date: _______
Market Economy Organizer
Directions: Provide responses for the listed items.
Summarize The U.S. Economic System
Describe each of the principles of The U.S. Economic System.
Market Economy
What are
the roles
of
in a
market
economy?
Consumers
Producers
Self-Regulating Principles of a Market Economy
How does demand impact businesses?
How does supply impact businesses?
Examples:
8721 Principles of Business and Finance
Examples:
Summer 2010, Version 2
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Name ____________________ Class __________ Date __________
What is the Market Price? Activity
Directions: Use the figures provided to graph the demand, supply, and market price.
Determine the market price and explain the relationship between the demand and
supply of the products.
1. Johnson’s Jacket Depot
Demand table
Quantity
Price
1000
1550
2000
2500
$24
$22
$20
$18
Demand graph
Supply graph
Supply table
Quantity
Price
1000
1550
2000
2500
$18
$22
$24
$26
Use the demand and supply lines above to determine how much the jackets will cost.
Graph the market price for the jackets by using the graph below.
Market price graph
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What is the Market Price? Activity continued
Directions: Use the figures provided to graph the demand, supply, and market price.
Determine the market price and explain the relationship between the demand and
supply of the products.
2.
3.
Software House
Price per game
$15
$13
$11
$9
Games demanded
15
30
45
60
Software House
Price per game
$13
$15
$17
$19
Games supplied
15
35
45
60
Burn’s Baby Dolls
Price per doll
$40
$30
$20
$10
Dolls demanded
10
20
30
40
Burn’s Baby Dolls
Price per doll
$20
$25
$30
$45
Dolls supplied
10
20
35
40
8721 Principles of Business and Finance
Summer 2010, Version 2
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Name ____________________ Class __________ Date __________
Economic Choices and Systems Key Terms Crossword Puzzle
Directions: Complete the crossword puzzle.
8721 Principles of Business and Finance
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Economic Choices and Systems Key Terms Crossword Puzzle
Across
1. Combines elements of the command and market economies
3. The initiative to combine natural, human, and capital resources
5. Value of the next-best alternative that is forgone to produce or obtain another product
8. Businesses that offer the same goods to the same customers
11. Individuals and organizations that determine which goods and services will be available for
consumption
16. Process of choosing which needs or wants will be satisfied
20. Means from which goods and services are produced
22. Right to purchase, use, and discard of things of value
23. Activities that can be consumed at the time of purchase to satisfy needs and wants
24. Condition that exists when wants or needs exceed resources available
25. Study of the decisions made for production, distribution, and consumption of goods and services to
satisfy needs and wants
26. Necessities required for living
27. Buys and uses the goods and services
Down
2. Goods and money used in the production of goods and services
4. Raw materials supplied by nature
6. People using efforts, knowledge, and skills at work to produce goods and services
7. Economic system which freedom to consume and produce goods and services exists
9. Economic system in which decisions are based on customs and centered on family
10. Items that can be purchased to satisfy needs and wants
12. Money left after selling goods and services and costs of operating a business have been paid
13. Goods that are purchased to add comfort or pleasure to life
14. Anywhere goods and services exchange hands
15. Process of giving up something for gaining something else
17. Goods and services are owned and controlled by the people
18. Opportunity to make choices of goods and services and accept consequences of decisions
19. Economics system in which the government owns resources and dictates what is produced
21. The point where supply and demand are equal
Capital resources
Command economy
Competitors
Consumer
Economics
Economic decision-making
Economic resources
Entrepreneurial resources
Free enterprise
Freedom of choice
Goods
Human resources
Market economy
Market price
Marketplace
Mixed economy
Natural resources
Needs
8721 Principles of Business and Finance
Opportunity cost
Private property
Producers
Profit
Scarcity
Services
Tradeoff
Traditional economy
Wants
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