Needs vs. Wants
What is a need?
A need is something essential for survival, such as food, water, shelter, and clothing.
What are the four factors of production?
Land, labor, capital, and entrepreneurship.
What does scarcity mean in economics?
Scarcity refers to the limited availability of resources relative to the unlimited wants of individuals and societies.
What Pricing strategie focuses on other companies selling similar goods or services?
Competitor Pricing
What are the two key groups in the circular flow model?
Houshold and Buisnesses
Give an example of a want and explain why it is not a need.
Example: A smartphone is a want because while it enhances convenience and communication, it is not essential for basic survival.
Define 'capital' in the context of factors of production.
capital refers to man-made resources such as machinery, tools, and buildings that are used to produce goods and services.
How does scarcity affect supply and demand?
Scarcity increases demand for a limited resource, often leading to higher prices as consumers compete for the available supply.
What pricing strategy involves reducing the price of a good at a specific time of year?
Seasonal Pricing
What do households provide to businesses that aids in the production of goods.
Labour
How do needs and wants influence consumer behavior?
Needs drive necessary spending, while wants fuel discretionary spending. Consumers prioritize needs but often allocate money towards wants when they have surplus resources.
How does labor contribute to the production process?
Labor refers to the human effort, both physical and intellectual, used in the creation of goods and services.
Provide an example of scarcity and its impact on pricing.
Example: During a drought, water becomes scarce, leading to increased demand and higher prices for bottled water and irrigation services.
What pricing strategy does Uber use? (consider that prices jump at peak periods)
Surge Pricing
What do businesses provide to households in exchange for labour.
Wages
Why is it important to differentiate between needs and wants in economics?
Differentiating between needs and wants helps in resource allocation and economic planning, ensuring that essential goods are prioritized in production and distribution.
Explain how natural resources are classified as a factor of production.
Natural resources, or land, include all resources that come from the earth such as minerals, water, and timber, and are used as raw materials in production.
Why is scarcity considered a central concept in economics?
Scarcity forces individuals and societies to make choices about how to allocate limited resources, which is the foundation of economic theory.
Explain how cost plus pricing works?
1. Add up all costs to work out the unit cost - land labour, capital
2. Decide on a profit margin.
3. add them together to get the price.
What is it called when households give money to businesses for goods and services.
Consumer spending
Discuss how understanding needs and wants can impact personal financial decisions.
Understanding the difference can help individuals prioritize essential expenses (needs) and limit spending on non-essential items (wants), leading to better financial management and saving habits.
Discuss the role of entrepreneurship in the factors of production.
Entrepreneurs organize the other factors of production—land, labor, and capital—to create goods and services. They take risks and innovate to drive economic growth.
What is opportunity cost?
The value of the next best thing you didnt choose to spend money on.
Name all the pricing strategies we have discussed in class. (6)
Cost-Plus, Discount, Competitor, Dynamic, Surge, Seasonal, Premium
Explain how money flows through the circular flow model.
Households provide labour to Businesses
Buinesses pay wages to households
Housholds spend wages on goods and services (Consumer spending) to businesses
Businesses create and sell goods and service to households.