Lesson 1
what is a producer?
person or company who makes a good or service to sell to others
what is currency?
the type of money used in a particular place
what is interest?
extra money you get when you keep your money in a bank
what is an import?
goods that are brought in from another country to be sold here
what is a command economy?
what is a consumer?
person or company who buys a good or service
what is inflation?
rise in the usual price of many goods and services
what is advertising?
the use of public notices to bring attention to a product or service
what is an export?
what is the difference between a want and a need? give 2 examples for each
a need is something you must have to live (water, food, shelter)
a want is something you might like to have but do not need (toys, TV, video games)
what is a free enterprise system?
producers have the right to create any good or service they want
what is profit?
the money a business earns over a period of time, a year
how can advertising help the economy?
makes people want to buy things that they may have not bought before - puts more money into the economy
what is division of labor?
separation of work process into a number of different jobs
what is the difference between a good and a service? give 2 examples of each
a good is a product (shirt, computer, granola bar)
a service is something that someone does for someone else (teacher, hairdresser)
what is a market economy?
entire area or country in which things are bought and sold freely
what is the difference between supply and demand?
supply- amount of product that businesses have available to sell
demand- amount of a product that consumers are willing to buy
Why do people need an income?
so they can afford wants and needs
How do goods get from one place to another? 3 examples
goods are transported around the world by large cargo ships, trains, jumbo jets, and trucks
What are the 2 types of economies? Explain each one.
Market - producers can provide any goods or services they want and set the prices
command- the government decides what to produce, provide, and they set the prices
What are 3 ways people can take part in our economy?
- sell something
If demand for a product is low, what will happen to the price?
What if the demand for the product is high?
low demand = low price
high demand = high price
Explain how banks benefit savers, bankers, and borrowers
savers earn interest on their money
bankers make profits on their loans
borrowers get money for things they need to buy
How do countries depend on each other to succeed?
globalization has meant that countries are interdependent, which means they depend on each other for goods and services
explain globalization
the process through which goods and ideas spread between different countries