Define
Define Economics
The study of how individuals and societies make decisions about ways to use scarce resources to fulfill wants and needs
What does the acronym TINSTAAFL stand for?
"There is no such thing as a free lunch"
Video Games, Jewelry, Brand Clothes, Aircons
Wants
List examples of Needs (At least 3 examples)
Food, Water, Clothing, Shelter, Money
Describe the factor of production: Land
Natural resources used to create goods or provide services
Define Scarcity
Fundamental economic problem of meeting people's virtually unlimited wants with scarce resources
What is produced using the four factors of production?
Goods and Services
Cars, Kitchen Appliances, Phones
Durable Goods
List the 3 economic choices society must make when allocation resources
What to Produce?
How to Produce?
For Whom to Produce?
Describe the factor of production: Entrepreneurs
•Risk taker in search of profits who does something new with existing resources
•Innovators responsible for much of the change in our economy
•Thought to be the driving force in an economy
⚬Start new businesses
⚬Bring new products
Define Resources
The factors used in producing goods or providing services.
What is the difference between goods and services?
Goods
⚬Tangible economic product that is useful, scarce and transferable to others
Services
⚬Work or labor performed for someone
Food, Clothes, Notebooks, Gas
Nondurable Goods
List the four factors of production
Land
Capital
Labor
Entrepreneur
Describe the difference between factor markets and product markets
Factor Markets
⚬Market where the factors of production (land, labor, capital, entrepreneur) are bought and sold
(Meant for businesses to buy resources)
Product Markets
⚬Market where goods and services are bought and sold
(Meant for consumers to buy products)
Define the difference between needs and wants
Need
•A basic requirement for survival
Want
•Something we would like to have but is not necessary for survival
How is it possible for wealth to be generated by the economy?
Circular flow of economic activity. The more people spend the more businesses make the more people earn.
Organized way in which society provides for the wants and needs of its people
Economic Systems
List 4 key elements to the study of economics
Description
Analysis
Explanation
Prediction
Describe the difference between durable and non-durable goods
Durable Goods
•Goods that last for at least three years when used regularly
Nondurable Goods
•Goods that wears out or lasts for fewer than three years when used regularly
Define the 3 economic choices society must make when allocated resources
What to Produce
•Society must decide what will be produced or provided
How to Produce
•Society must decide what production method they should use
For Whom to Produce
•Society must decide who they are producing these items for
What do the seven economic goals of the US have in common
All the goals are meant to make the lives of the people living within the US better.
Resources required to produce the things we would like to have
Factors of Production
List at least 3 economic goals of the US
Economic Freedom
Economic Efficiency
Economic Equity
Economic Security
Price Stability
Full Employment
Economic Growth
Describe the three major economic systems
Traditional Economy
•Economic system in which the allocation of scarce resources and other economic activities are based on rituals, habits or customs
Command Economy
•Economic system with a central authority that makes the major economic decisions about what, how and for whom to produce
Market Economy
•Economic system in which supply, demand and the price system help people make economic decisions and allocate resources