Economic Flow
OWN THE RESOURCES USED IN PRODUCTION
TRADITIONAL ECONOMY
*Economic decisions are based on precedent
*People often perform the same type of work their parents do.
*Inability to satisfy all wants at the same time
*Limited good and resources require that choices be made
PROPRIETORSHIP
WHAT IS THE RESOURCES MARKET
COMMAND ECONOMY
*Central ownership
*Centrally planned economy
*Lack of consumer choice
CONSUMPTION
*Using goods and services
*Consumers preferences and price determine what is purchased
PARTNERSHIP
FREE MARKET
*Private ownership of property
*Profit motive
*Competition
*Individual choice
*Minimal government involvement
CHOICE
*Selection of items or actions from a set of possible alternatives
*Individuals must choose or make decisions about desired goods
CORPORATION
Authorized by law to act as a legal entity regardless of the number of owners.
Owners share the profit
MIXED ECONOMY
*Individuals are owners and decision makers
*Government is owner for public sector
*Government's role is greater than a free market economy
*United States economy
RESOURCES
*Factors of production that are used in the production of goods
*Types of resources are natural, human, capital, and entrepreneurship
ENTREPRENEUR
A person who takes a risk to produce and sell goods and services in search of profit
BUSINESS
OPPORTUNITY COST
*What is being given up when a choice is made
(second best choice)
PRODUCTION
*The combining of human, capital, and entrepreneurship resources to make goods
*Available resources and consumer preferences determine production
DOUBLE JEOPARDY
FREE MONEY!!