CHAPTER
1
SLIDE 1
CHAPTER
1
Economic Decisions
and Systems
1-1
Satisfying Needs and Wants
1-2
Economic Choices
1-3
Economic Systems
1-4
Supply and Demand
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Principles of Business, 8e
1-1
Satisfying Needs
and Wants
Goal 1 Explain the difference between
needs and wants.
Goal 2 Distinguish between goods and
services.
Goal 3 Describe the types of economic
resources.
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SLIDE 2
CHAPTER
1
SLIDE 3
KEY TERMS
● needs
● wants
● goods
● services
● economic resources
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Principles of Business, 8e
CHAPTER
1
SLIDE 4
NEEDS AND WANTS
● Needs are essential
● Wants add to the quality of life
● Needs and wants are unlimited
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Principles of Business, 8e
CHAPTER
1
SLIDE 5
Checkpoint 
● What is the difference between a need
and a want?
● Needs are those things required to live,
such as food, clothing, and shelter.
● Wants are things that add comfort and
pleasure to our lives such as television,
music CDs, and movies.
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Principles of Business, 8e
CHAPTER
1
SLIDE 6
GOODS AND SERVICES
● Goods and services for businesses and
consumers
● The U.S. economy
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Principles of Business, 8e
CHAPTER
1
SLIDE 7
Checkpoint 
● How do people satisfy their wants and
needs?
● People satisfy their wants and needs by
purchasing and consuming goods and
services.
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Principles of Business, 8e
CHAPTER
1
SLIDE 8
ECONOMIC RESOURCES
● Natural resources
● Human resources
● Capital resources
● Resources are limited
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Principles of Business, 8e
CHAPTER
1
SLIDE 9
Checkpoint 
● What are the three types of economic
resources? Give an example of each type.
● Natural: water, land, trees, animals, and minerals.
● Human: labor (people who run farms and factories,
transport goods, provide services, or manage
businesses).
● Capital: money, land, buildings, tools, and
equipment.
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Principles of Business, 8e
1-2
Economic Choices
Goal 1 Understand the basic economic
problem.
Goal 2 Explain the steps in the decisionmaking process.
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SLIDE 10
CHAPTER
1
SLIDE 11
KEY TERMS
● scarcity
● economic decision-making
● trade-off
● opportunity cost
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Principles of Business, 8e
CHAPTER
THE BASIC ECONOMIC
PROBLEM
1
SLIDE 12
● Choices
● Trade-offs and opportunity costs
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Principles of Business, 8e
CHAPTER
1
SLIDE 13
Checkpoint 
● What is opportunity cost?
● Opportunity cost is the value of the next
best alternative that you don’t choose.
● It is what you are willing to give up in order
to have your first choice.
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Principles of Business, 8e
CHAPTER
THE DECISION-MAKING
PROCESS
1
SLIDE 14
1. Define the problem.
2. Identify the choices.
3. Evaluate the advantages and
disadvantages of each choice.
4. Choose one.
5. Act on your choice.
6. Review your decision.
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Principles of Business, 8e
CHAPTER
1
SLIDE 15
Checkpoint 
● What are the six steps in the decision-making
process?
● Define the problem.
● Identify the choices.
● Evaluate advantages and disadvantages of each
alternative.
● Choose one.
● Act on your choice.
● Review your decision.
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Principles of Business, 8e
1-3
Economic Systems
Goal 1 Identify the three economic
questions.
Goal 2 Differentiate among the main types
of economic systems.
Goal 3 Describe the economic system of
the United States.
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SLIDE 16
CHAPTER
1
SLIDE 17
KEY TERMS
● economic system
● command economy
● market economy
● traditional economy
● mixed economy
● capitalism
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Principles of Business, 8e
CHAPTER
THE THREE ECONOMIC
QUESTIONS
1
SLIDE 18
● What to produce?
● How to produce?
● What needs and wants to satisfy?
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Principles of Business, 8e
CHAPTER
Checkpoint 
1
SLIDE 19
● What are the three economic questions?
● What goods and services will be produced?
● How will the goods and services be
produced?
● What needs and wants will be satisfied with
the goods and services?
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Principles of Business, 8e
CHAPTER
TYPES OF ECONOMIC
SYSTEMS
1
SLIDE 20
● Command economy
● Market economy
● Traditional economy
● Mixed economies
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Principles of Business, 8e
CHAPTER
1
SLIDE 21
Checkpoint 
● What are the main differences among
the three economic systems?
● The main differences among the economic
systems are found in the ways in which the
three economic questions are answered.
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Principles of Business, 8e
CHAPTER
THE U.S. ECONOMIC
SYSTEM
1
SLIDE 22
● Private property
● Freedom of choice
● Profit
● Competition
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Principles of Business, 8e
CHAPTER
1
SLIDE 23
Checkpoint 
● Name the four principles of the U.S.
economic system.
● Private property
● Freedom of choice
● Profit
● Competition
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Principles of Business, 8e
1-4
Supply and
Demand
Goal 1 Describe supply and demand orally
and with graphs.
Goal 2 Discuss how supply and demand
affect prices of products and
services.
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SLIDE 24
CHAPTER
1
SLIDE 25
KEY TERMS
● consumer
● producers
● demand
● supply
● market price
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Principles of Business, 8e
CHAPTER
PARTICIPATING IN A MARKET
ECONOMY
1
SLIDE 26
● Consumers set demand
● Producers establish supply
● A graphic view
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Principles of Business, 8e
CHAPTER
1
SLIDE 27
DEMAND AND SUPPLY
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Principles of Business, 8e
CHAPTER
1
SLIDE 28
Checkpoint 
● How does the price of a product affect
demand and supply?
● As prices decrease, the number of
consumers willing and able to purchase the
product (demand) will increase.
● As prices increase, businesses will be
willing to supply larger quantities of the
product.
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Principles of Business, 8e
CHAPTER
1
SLIDE 29
DETERMINING PRICE
● Factors influencing demand
● Factors influencing supply
● Determining market price
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Principles of Business, 8e
CHAPTER
1
SLIDE 30
MARKET PRICE
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Principles of Business, 8e
CHAPTER
1
SLIDE 31
Checkpoint 
● How is the market price for a product
determined?
● Supply, demand, and competition
determine the market price for a product or
service.
● The market price is the point at which
supply and demand are equal.
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Principles of Business, 8e