Transcript Economics Boot Camp

To
create goods and
services for consumers
Profits are (hopefully)
earned that then circulate
money throughout the
economy.
 Goods
– tangible (you can touch
it)
› Ex. Car, cell phone, pencil
 Services – intangible (you can’t
touch it)
› Ex. Haircut, Car Wash, Yard Work
 Land:
natural resources
› Ex. Trees, lakes, coal
 Labor: HUMANS working
› Ex. Cashier, Teacher
 Capital: tools, machinery, robots, etc.
› Ex. Cash register, lawn mower, computer
 Entrepreneurship: owning a business
› Ex. Truett Cathy (owner of Chic-fil-A)
 Scarcity
– lack of resources (or not
enough stuff)
› Fundamental problem of
economics
 Must be able to distribute scarce
resources using different methods
› Rationing/Coupons
› Money

Demand – what consumers are willing to
purchase at all available prices
› Law of Demand – if the price increases, quantity
demanded decreases, and vice versa

Supply – what producers are willing to sell at
all available prices
› Law of Supply: if prices increase, quantity supplied
increases, and vice versa

Traditional economic system: based on customs,
rituals, and habits
› Usually run by an elder, chief, or medicine man
› Jobs are handed down from family members
› Do not like change – severe punishment for
change
› Ex. Amish, Alaskan/Canadian Inuits, Australian
Aborigines
 Command
Economic System: controlled
by a central authority
› Usually communist or socialist
› Run by a dictator, authoritarian
government, or totalitarianism
› Jobs are chosen by the government
system
› Ex. Cuba, North Korea
 Market
Economic System: people are
allowed to control the system
› Usually a democracy style
government system
› May be led by a President or
central government group but they
are chosen by the people
› Ex. United States, England, Japan
 Free
Enterprise System: businesses are
allowed to run freely without much (or
any) government control
 Modified Free Enterprise System:
businesses have a lot of freedom but
the government regulates prices,
goods sold, services provided, etc.
Private
Enterprise: Able to own
a businesses without much
interference from government
› Usually able to sell whatever
you wish, hire whomever you
want, etc.
Consumer Sovereignty: consumers choose
all prices, what is sold, how much is sold etc.
 Market Failures: a breakdown in the market
causing a business to possibly fail
› Negative/Positive Externalities: not
involved in the situation but affected
anyways
 Ex. An airport expands = creates new
jobs (positive), pollution/traffic/noise
(negative)

 Can
be hard to get loans
 Hard to find reliable business partners
 Hard to find reliable employees
 Location
 Competition
 Hard to actually earn a profit
› Inputs may be too expensive
Two
or more businesses
competing for customers,
sales, profit, etc.
 Want
to use the least amount of
inputs to create the most amount of
outputs
› Ex. Lemonade Stand
 Cheap lemons, sugar, water =
Inputs
 Sell a lot of lemonade for as high a
price possible = Outputs
 Division
of Labor: one of the best
ways to achieve productivity
› Divide up jobs so workers
perform fewer tasks
› Ford created the assembly line
for this purpose