Resources
Land, water, trees, and oil
What are natural resources?
Inability to satisfy all wants at the same time
What is scarcity?
Combining of human, natural, capital, and entrepreneurship resources to make goods or provide services
What is production?
Economy is based on custom and historical precedent, which means performing same type of work as parents/grandparents
What is a Traditional Economy?
Construction workers, mechanics, nurses, and lawyers
What are human resources?
Giving up $24 for babysitting to attend grandma's birthday party
What is opportunity cost?
Using or buying goods and services
What is consumption
Private ownership; profit motive; competition; consumer sovereignty; individual choice & minimal(little) government involvement
What is a Free Market Economy?
Machines, tools, factories, pencils, desk, bulldozer
What are capital resources?
Demand
What is the amount of a good buyers are willing to buy
Person who buys something
What is a consumer?
Central ownership, centrally planned economy, government control and lack of consumer choice?
What is a Command Economy?
A girl scout sells cookies outside of a college library during final exam week. She makes hundreds of dollars
What is entrepreneurship?
Supply
What is the amount a producer is willing to make?
Consumer preferences, desires and needs of consumer control production
What is consumer sovereignty?
Example: Many students are willing to buy the purple bag Doritos but not the green bag Doritos.
Owners and decision makers for private sector, and government as the owner and decision maker for public sector
What is a Mixed Economy?
Give an example of all four resources being used to make a single good or service.
Answers will vary
Winter coats sold in June. Demand is___________and price is__________
What is low? (Demand is low and price is low.)
Describe a scenario showing an opportunity cost
Answers will vary
Three basic questions of economics
What will be produced? How will it be produced? For whom will it be produced?