Transcript ENT Lesson 2 PowerPoint

Entrepreneurs in a
Market Economy
Ch 2.1
Ideas in Action pg. 35
1. What type of interest do you think Scott had
that helped him to find success in this
business?
2. Which of the lessons that Scott has learned
do you think is most important?
3. Why do you think it is important to find
balance between work and play?
Do you want it or need it?
• Needs – are things you must have in order to
survive.
• Wants – those things that you think you must
have in order to be satisfied.
• What do you need? What do you want?
• Maslow’s Hierarchy of Needs Pyramid
Economic Resources
• Economic Resources – the means through
which goods and services are produced.
• Goods – products you can see and touch.
• Services – activities that are consumed as
they are produced.
Factors of Production
• Natural Resources – raw materials supplied by
nature.
• Human Resources – people who create goods
and services.
• Capital Resources – assets invested in the
production of goods and services.
Role of Entrepreneurship in the U.S. Economy
Supply and Demand (pg 40)
Capital Investment and Job Creation
Change Agents
What roles do needs and wants play in
determining what is produced in an economy?
• Think of something you would describe as a
“need” but your parents would describe as a
“want.”
• How does the availability of economic resources
affect decisions the entrepreneurs make?
•
•
•
•
How Economic Decisions Are Made
Focus on Economics (pg. 42)
Economic Systems – must answer 3
questions:
1. What goods and services will be produced?
2. How will the goods and services be produced?
3. What needs and wants will be satisfied with
the goods and services produced?
•
•
Economic Decisions
• Command Economy – the government
determines what, how and for whom products
and services are produced.
• Market Economy – individuals and businesses
decide what, how, and for whom goods and
services are produced.
• Traditional Economy – goods and services are
produced the way they have always been
produced.
• Mixed Economy – elements of the command
and market economics are combined.
The U.S. Economic System
• What type of economic system do you think the
United States has?
• Capitalist – the private ownership of resources
by individuals rather by the government, is
another name for the economic system in the
U.S.
U.S. Based on 4 Basic Principals
• Private Property – you can own, use, or dispose
of things of value.
• Freedom of Choice – you can make decisions
independently and must accept the
consequences of those decisions.
• Profit – the differences between the revenues
taken in by a business and the costs of
operating the business.
• Competition – the rivalry among businesses to
sell their goods and services.
Economic Choices
• Economic Decisions Making – the process of
choosing which needs and wants, among
several, you will satisfy using the resources you
have.
• Scarcity – occurs when people’s needs and
wants are unlimited and the resources are
limited.
• Opportunity Cost – the value of the next-best
alternative—the one you pass up.
Functions of the Business (pg. 47)
• Production – provides products/services
• Marketing – product, distribution, price, and
promotion
• Management – developing, implementing, and
evaluating plans.
• Finance – the amount of capital needed to start
the business and how the capital will be
obtained.
What Affects Price?
• Supply – is how much of a good or service
a producer is willing to produce at
different prices.
• Demand – is an individual’s need or desire
for a product or service at a given price.
• Equilibrium Price and Quantity – point at
which the supply and demand curves
meet.
Cost of Doing Business
• Fixed Costs – costs that must be paid regardless of
how much of a good or service is produced.
• Variable Costs – that go up and down depending
on the quantity of the goods and services
produced.
• Marginal Benefit – measures the advantages of
producing one additional unit of a good or service.
• Marginal Cost – measures the disadvantages of
producing one additional unit of a good or service.
Market Structures and Prices
• Perfect Competition – very large number of businesses
producing nearly identical products and has many
buyers.
• Monopolistic Competition – large number of independent
businesses that produce goods and services that are
somewhat different.
• Oligopoly – a market is dominated by a small number of
businesses that gain the majority of total sales revenue.
• Monopoly – there is only one provider of a product or
service.