Transcript Slide 1
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 © 2012 Cengage Learning. All Rights Reserved. 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. © 2012 Cengage Learning. All Rights Reserved. SLIDE 2 CHAPTER 1 SLIDE 3 KEY TERMS ● needs ● wants ● goods ● services ● economic resources © 2012 Cengage Learning. All Rights Reserved. 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 © 2012 Cengage Learning. All Rights Reserved. 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. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e CHAPTER 1 SLIDE 6 GOODS AND SERVICES ● Goods and services for businesses and consumers ● The U.S. economy © 2012 Cengage Learning. All Rights Reserved. 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. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e CHAPTER 1 SLIDE 8 ECONOMIC RESOURCES ● Natural resources ● Human resources ● Capital resources ● Resources are limited © 2012 Cengage Learning. All Rights Reserved. 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. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e 1-2 Economic Choices Goal 1 Understand the basic economic problem. Goal 2 Explain the steps in the decisionmaking process. © 2012 Cengage Learning. All Rights Reserved. SLIDE 10 CHAPTER 1 SLIDE 11 KEY TERMS ● scarcity ● economic decision-making ● trade-off ● opportunity cost © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e CHAPTER THE BASIC ECONOMIC PROBLEM 1 SLIDE 12 ● Choices ● Trade-offs and opportunity costs © 2012 Cengage Learning. All Rights Reserved. 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. © 2012 Cengage Learning. All Rights Reserved. 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. © 2012 Cengage Learning. All Rights Reserved. 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. © 2012 Cengage Learning. All Rights Reserved. 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. © 2012 Cengage Learning. All Rights Reserved. SLIDE 16 CHAPTER 1 SLIDE 17 KEY TERMS ● economic system ● command economy ● market economy ● traditional economy ● mixed economy ● capitalism © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e CHAPTER THE THREE ECONOMIC QUESTIONS 1 SLIDE 18 ● What to produce? ● How to produce? ● What needs and wants to satisfy? © 2012 Cengage Learning. All Rights Reserved. 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? © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e CHAPTER TYPES OF ECONOMIC SYSTEMS 1 SLIDE 20 ● Command economy ● Market economy ● Traditional economy ● Mixed economies © 2012 Cengage Learning. All Rights Reserved. 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. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e CHAPTER THE U.S. ECONOMIC SYSTEM 1 SLIDE 22 ● Private property ● Freedom of choice ● Profit ● Competition © 2012 Cengage Learning. All Rights Reserved. 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 © 2012 Cengage Learning. All Rights Reserved. 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. © 2012 Cengage Learning. All Rights Reserved. SLIDE 24 CHAPTER 1 SLIDE 25 KEY TERMS ● consumer ● producers ● demand ● supply ● market price © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e CHAPTER PARTICIPATING IN A MARKET ECONOMY 1 SLIDE 26 ● Consumers set demand ● Producers establish supply ● A graphic view © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e CHAPTER 1 SLIDE 27 DEMAND AND SUPPLY © 2012 Cengage Learning. All Rights Reserved. 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. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e CHAPTER 1 SLIDE 29 DETERMINING PRICE ● Factors influencing demand ● Factors influencing supply ● Determining market price © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e CHAPTER 1 SLIDE 30 MARKET PRICE © 2012 Cengage Learning. All Rights Reserved. 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. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e