Economic Decisions
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Transcript of Economic Decisions
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Economic Decisions
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Today’s Objectives Identify the difference between
wants and needsExplain the difference between
goods and servicesDescribe economic resources used in
the production of goods and servicesUnderstand how scarcity applies to
economics
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Economics Definedo Study of producing, distributing, and
consuming goods and serviceso Involves decisions regarding the use
of resourceso Decisions are made by
Individuals (consumers) Businesses (producers) Societies (government)
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Economic DecisionsBusinesses make money by offering goods and services to satisfy the wants and needs of consumers and other businesses.
This is how wants and needs drive the U.S. economy.
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Think about it!
Make a list of the last 10 things you bought (or your
parents bought for you)
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The Economy’s Driving Force
NEEDSo Things necessary
for basic livingo Essential to human
life; required for survival
o Includes basic food, water, shelter, clothing
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The Economy’s Driving Force
WANTSo Things you would
like to haveo Non-essential, but
add to quality of lifeo Also referred to as
a luxury
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From your list, how many items were needs and how many were wants?
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Wants and Needs
Wants and needs determine what goods and services will be produced by businesses.
Individuals (consumers) make decisions on what to buy they vote with their
dollars
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Private vs. Public Wants Private wants are
what individuals or small groups of people desire
Public wants are widely shared by many people (society), such as highways, public libraries, shopping centers and parks.
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What satisfies our needs and wants?
Goods are things you can see and touch. They are tangible. Shoes, Groceries,
IPod
Services are satisfied through the efforts of other people or by equipment. They are intangible. Getting a haircut, go to
a movie, landscaping
In order to create goods or to provide a service, you need resources.
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Goods & Services WS
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Economic Resources
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Resources Are Limited Resources = Money Resources are limited Most people have
unlimited wants Consumers have to
make choices economic decisions
Basic Needs
+Unlimited
Wants
Economic Resources
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Scarcity Shortage of
resources Conflict between
unlimited wants and limited resources
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Price Gouging
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The Decision-Making Process
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Economic Decision-MakingThis is the process of choosing which of your wants will be satisfied. The decision can be made by following six steps…
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Decision-Making Process1. Define problem.2. Identify alternative
solutions3. Evaluate advantages /
disadvantages of each solution
4. Choose the best alternative
5. Take action on the choice
6. Review the decision
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Decision-MakingHandout