Chamberlain

What is an Economy?Who’s part of the

economy?What do you need

for there to be an economy?

Are you part of the US Economy?

Before we answer that…I want you to think of two things that you

really want to buy….it could be something you need or something that you just want.Actual good or a Service

I want the two things to be relatively close in price. Search the net for these objects and list the price and object on a piece of scrap paper.

Now what is an economy?What is your object/service you want/need?Where can you get it?Who makes the product if it is someone

different from where you are buying?Is your item a

LuxuryNecessity

What is a consumer? Are you a consumer

EconomySystem for producing and distributing goods

and services to satisfy a consumer’s needs and wantsTakes place at the Market

Place where buyers and sellers come togetherNeeds vs. Luxuries

How are the products and services we need and want produced?

Factors of Production: resources for producing goods and servicesEntrepreneur – the person or company

that developed the ideaLand – resources used to make your

product or provide your serviceLabor – Effort to create your productCapital –

Financial – Money to create product or serviceCapital good – goods used to create products

and services

Hula Hoop

Hula HoopAncient toy

No one person or company can claim “inventing” the hoop

Wham-O Company from LA made first plastic Hula Hoop

in 1948Sold 100 million in first year

How does your product fit in the Factors of Production?Land: Take your two products and make a

list of materials you would need to make the product.

Labor: What kind of labor would go into making your product/service?

Capital Goods – Oven to make pizzasFinancial Capital – Money to market and

create your product or service?

Create your own product or service.On a piece of paper, come up with a product

or service (school appropriate) you would want to invent or sell

Give your product a name and then go through the factors of production to decide how your product or service would be created

Entrepreneur, Land, Labor, and Capital

Buyers and SellersSellers

Goal is to maximize profitsTotal cost (land labor and capital) – Total

revenue = profitHow – Find your target market

Buyers/ConsumersSellers are often buyers…Choice

Both buyers and sellers deal with scarcity???

Scarcity Our needs and wants are unlimitedBut

MoneyResourcesTimeGood jobs

Are All Limited!!!!Even the wealthiest peopleEven the wealthiest countries Deal with Scarcity

Result of ScarcityChoices

Luxuries vs NecessitiesSubway or McDonald’s

Opportunity CostThe goods and services you give up when you

make a choiceSnow blower (me) vs. Treadmill (my wife)We bought the treadmillThe snow blower was the opportunity costPart-time job or play baseball – what you give

up is the opportunity cost

How has technology changed the economy?NewspaperRadioTV InternetWhat’s next?

FasterCheaperEasierLess human

involvementGood or bad?

Big C’s Pizza Entrepreneur - MELand – Natural Resources – Wheat, Vegetables,

and MilkLabor – Myself and two other workers – Prep,

Bake, Deliver and Clean-upCapital

Financial Capital - $50,000.00 in loans to start business

Capital Goods Pizza Oven, Trays, Boxes, Tables, Chairs, Pizza

cutters, etc.

Types of EconomiesTraditional

Command

Market

Mixed

TraditionalFamily, group or tribe

controls what is produced and owns the factors of production in common

Money is not an important aspect of this economy

People work because it is the only way goods will be produced

Command EconomyGovernment runGovernment controls

what is producedDictatorshipCommunism

Created for different reasons by societiesControlEquality

Market EconomyFactors of

production – land, labor and capital are owned by individuals

CapitalismFree EnterpriseCompetition is a key

element to a market economy

US – Mixed EconomyPrivate owned businesses

Government run/control

WalmartToppsNapolisChoice

EducationDefensePost OfficeSome forms of Public

TransportationPBSPublic WorksWaste Disposal

US Mixed EconomyRegulations

HealthEnvironmentWagesOvertime paySafetyCivil Rights

Other goods or services that the government should provide?