Economics

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Economics
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Scarcity

• Is a limited supply of an item.
• Example Our class is creating a project, you
  need scissors to cut out an object however the
  class only has one pair of scissors. The scissors
  are a scarcity in our classroom.

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Opportunity Cost

• The process of choosing one good or service over
  another.
• You cant buy everything that you want. Suppose
  you are at a fair. You have just enough money to
  buy either a ticket, or a stuffed animal. You
  decide to buy the ticket because you will always
  remember how much fun the ride was. The toy that
  you didnt buy is called your opportunity cost.

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Goods Services

• Goods are physical things you can touch.
• Services are not physical objects.
• Lets name some goods and services.
• Are hair cuts, toy trucks, computers, and car
  washes goods or services?

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Barter

• To barter is to trade one kind of goods or
  service for another.
• People began trading because there were goods and
  services they needed or wanted.
• Do we use bartering today?

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How is our Economy managed?

• An economy is how the resources of a country,
  state, region, or community are managed.
• In a free enterprise system businesses have
  the right to produce any goods or provide any
  service that they want.
• The government does not tell these businesses
  what they can produce or sell.

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Consumer

• Anyone who buys a good or a service is a
  consumer.
• You are a consumer whenever you buy something
  for example when you buy a box of candy you are a
  consumer.

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Producer

• Anyone who makes a good, or does a service to
  sell.
• Producers in the United States can set prices for
  the goods that they have made or for a service
  that they want to sell. They must think about
  what consumers are willing to pay.

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Profit

• Money that a producer gains by selling a good
  or a service is a profit.
• However, a loss is money that a producer
  could lose.

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Market economy

• When consumers buy less of something the price
  __________.
• lowers

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Monopoly

• When one company buys all of the other companies
  that produce the same thing.
• Example If a company makes lawn-mower engines
  and they buy all of the other companies that make
  lawn-mower engines they have created a monopoly
  you must buy your lawn-mower engine from that
  company you dont have a choice.

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Supply Demand

• Supply- products that are made available to you
  and me.
• If a business has too much of one product, there
  is a large supply. The price of the product may
  go down.

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Demand

• The quantity of an item that consumers are
  willing to buy at is the demand.
• If demand is high for a certain product, and the
  supply is low, the price for the product goes
  _________.
• up

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Review Activity

• An opportunity cost is what you give up when you
  choose one thing over another.
• Write a paragraph about when you had to make a
  choice. What was your opportunity cost? Did you
  make a good choice or not? This paragraph can be
  fictional.

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• Make a list of the pros and cons of buying a new
  DVD or a sweatshirt. Which one do you decide to
  buy? Why? What is your opportunity cost?