UNDERSTANDING ECONOMIC SYSTEMS
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Transcript of UNDERSTANDING ECONOMIC SYSTEMS
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UNDERSTANDING ECONOMIC SYSTEMS
CH 1.3
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SUPPLY AND DEMAND Lets read pages 19-21 together!
Demand:▪ Quantities of a good or service that consumers are
willing to buy at various prices and time periods Supply:
▪ Quantities of a good or service that producers are willing to sell at various prices and time periods
Equilibrium price: The price at which the quantity supplied exactly
equals the quantity demanded of that product.
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Supply and demand graph
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CAREER SIMULATION
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ECONOMIC TERMS
PRODUCTION: ▪ the creation of goods and services
RESOURCES:▪ The raw materials, labor, knowledge, and equipment
used in production. SCARCITY:
▪ Consumers wants are greater than the resources available
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TYPES OF RESOURCES
Human▪ Efforts of humans that add value to products
Natural▪ Limited resources available on the planet
Capital▪ Financial or monetary resources invested to
produce products
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TYPES OF ECONOMIES Traditional:
▪ Production is passed through generations▪ Tribes in remote areas
Command:▪ Government owned▪ Companies are told what to sell
Market (Capitalist)▪ People own the businesses▪ Purpose is to generate a profit▪ Here in the U.S.
Mixed▪ Combination of a Command & Market (China)
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5 TYPES OF ADVERTISING
CH 1.5
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BRAND ADVERTISING
More likely for consumers to remember and know the brand
▪ Examples? Catchy jingles? Funny commercials?▪ Famous Athletes, celebrities?
Cost of brand advertising is a higher price for the product or service▪ Coca-cola spends more money on advertising
than any other product in the world Why does brand advertising raise the price?
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celebrities!
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Product placement
Putting brand name items in a movie for everyone to see!
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Product placement….
How many items do you see?
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INFORMATIVE ADVERTISING Consumers will buy the product
based on what the product can do▪ (This is the correct way of consuming!!)
May include testimonial from satisfied costumers▪ Infomercials!
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http://www.youtube.com/watch?v=23zGquwJfbw&feature=related
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COMPARATIVE ADVERTISING A comparison of one product to
another (competitor) Try to exploit the competitor’s
weakness
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comparative advertising
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DEFENSIVE ADVERTISING May be in response to a claim made
by a competitor The opposite of Comparative
advertising The wars between Pepsi and Coke in
the 80’s
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PERSUASIVE ADVERTISING Ads try to appeal to emotions of the
consumer Their product will make you happy,
successful, popular, etc…
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Persuasive advertising