Goods v. Services
What is a good?
A tangible product; something you can use or consume
What are the four Factors of Production?
Land, Labor, Capital, Entrepreneurship
A chef makes a meal.
Is the chef a producer or a consumer in this context?
Producer
How do you calculate profit/loss?
Revenue - Expenses = Profit/Loss
Define scarcity.
Is food a good or a service?
Good
What is an example of a land resource?
ex: water, grass, soil, metals, animals, etc.
A SoundCloud rapper uploaded his new song. Is the rapper a producer or a consumer in this context?
Producer
Dunkin Donuts made $100 in revenue and spent $50 in expenses.
Did they make a profit or a loss?
Define Selling.
Exchanging a good or service for an agreed upon sum of money.
Ulta sells different types of makeup, skin care and hair care products. They also offer makeovers and haircuts.
Does Ulta offer goods, services, or both?
Both!
Makeup products are goods. Haircuts are services.
A book publisher had its employees stamp the covers of the newly printed books.
This is an example of what Factor of Production?
Labor - The employees are doing work to make the product.
How can Chipotle act as both a producer and a consumer?
Producer - It creates food bowls and burritos for people to buy.
Consumer - It has to purchase ingredients like vegetables and chicken.
Chick-Fil-A earned $2,000 in revenue and had $3,000 in expenses. Did they earn a profit or loss? By how much?
Loss -$1,000
Give an example of an entrepreneur that is NOT Steve Jobs.
ex: Bill Gates, Elon Musk, etc.
Uhaul is company where people can rent trucks and vans to move their belongings across distances great and small.
Does Uhaul offer a good, a service, or both?
Uhaul offers a service - the rental of trucks. You don't pay to keep the truck, you pay for the use of the truck and the convenience of having it available to you.
Amazon was one of the first companies to create its own website where people can shop online for everything in one place and have it delivered to their home.
This is an example of what Factor of Production?
Who brings products from the producers to the consumers?
Distributors
On Monday, TopKid earned $500 in sales. On Tuesday, the company made $600. During the same time frame, TopKid spent $700 on production costs.
Did TopKid earn a profit or loss? By how much?
Profit! (500+600)-(700)=400
Explain why money is not a productive resource.
Money is used to purchase capital and compensate labor. However, it does not create anything.
Your car broke down, and you take it to the local repair shop. There, a mechanic looks at your car, refills the oil, changes out the break pads and aligns your tires. Your bill comes out to $600.
Are you paying for goods, services or both?
Both!
You're paying for the new oil and break pads. (goods)
You're also paying for the diagnostic look at your car and the tire alignment. (services)
The Microsoft Office tech team worked on a new software update to help its programs run faster on computers.
This is an example of what Factor of Production?
Labor - The tech team (people) used intellectual labor to create the software update.
Explain how consumption influences production.
When there is more consumption, companies know to produce more.
When there is less consumption, companies know to produce less.
This month, McDonald's earned $5,000 in revenue. They also spent $500 on ingredients, $2,000 on labor costs and $800 on machine repairs.
Did McDonald's earn a profit or a loss? By how much?
Profit! (5000)-(500+2000+800) = 1700
Explain an example of how scarcity plays into production.
ex: Because I use certain resources to make a Tshirt, that means someone else's Tshirt isn't being made with my resources. Producing some goods and services leaves other goods and services unmade.