Unit 1 Business in a Changing World

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Unit 1Business in a Changing World

• Objective 1.1
• Analyze the impact that scarcity has on various
  economic systems

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Scarcity

• The Basic Economic Problem

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What is Scarcity?

• Scarcity is the conflict between our needs and
  wants. (i.e. Unlimited Wants vs. Limited
  Resources)
• Scarcity is the Basic Economic Problem.
• Scarcity affects everyone

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Needs vs. Wants The Basic Struggle

• Needs are necessary for your survival
• Wants are not necessary for survival, they add
  comfort and pleasure to our lives.

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3 Ways Needs and Wants are Satisfied

• Goods
• Services
• Economic Resources

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Goods

• Goods are things that you can see and touch.
• Goods are called products which satisfy our
  material needs.
• Examples TV, VCR, Toys, Shoes, Jacket, etc.

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Service

• Services are satisfied through the efforts of
  other people.
• Example going to the movies, getting a
• haircut, taking a swimming lesson, etc.

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Economic Resources

• Economic Resources are the means through which
  goods and services are produced.
• Economic Resources are also known as Factors of
  Production.

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Making Economic Decisions

• Decision Making is a process of choosing which
  wants will be satisfied among the many wants
  being considered.
• Mastering this process will make decisions easier
  which will result in better choices.

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The Decision Making Process

• Define The Problem
• Identify The Alternatives
• List All Of The Advantages and Disadvantages

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The Decision Making Process Continued

• Make A Choice
• Act On Your Choice
• Evaluate Your Decision

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The Cost of Choosing

• Opportunity Cost What you give up when making
  one decision over another.
• Example Attending College vs. Not Attending
  College

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Factors That Affect Decision Making

• Values
• Goals
• Each decision is affected by our individual
  values and goals.

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Values

• Values are learned early in life.
• They are beliefs and principles you consider
  important, correct, and desirable
• Ideals in life that are important to you.
• Principles by which a person lives.

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Goals

• Short-term Goals that can be accomplished in a
  few days.
• Intermediate Goals that be accomplished in a few
  months or years.
• Long-term Goals you expect to reach over a
  period of years.

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Factors of Production

• Natural Resources
• Human Resources
• Capital Resources
• Entrepreneurial Resources

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Natural Resources

• All material that comes from the earth, the
  water, or the air.
• All of the goods that we use today began with one
  or more natural resources.
• Types of Natural resources Renewable and
  Non-Renewable

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Human Resources

• The people who work to produce goods and services.

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Capital Resources

• The tools, equipment, and buildings that are used
  to produce goods and services.

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Entrepreneurial Resources

• Seeks to combine human, capital and natural
  resources.

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The Need For An Economic System
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Key Economic Questions

• What To Produce?
• How To Produce?
• For Whom To Produce?

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4 Major Economic Systems

• Traditionalism
• Communism
• Socialism
• Capitalism

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Traditionalism
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Communism
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Socialism
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Socialism Cont.
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Capitalism
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Capitalism Cont.
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Features of The U.S. Market Economy

• Private Enterprise
• - Freedom to decide how you want to make a
  living.
• Private Property
• - The right to own, use or dispose of things of
  value.
• Profit
• - The money left from sales after subtracting
  all the costs of operating a business.

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The U.S. Market Economy

• Competition
• - The rivalry among businesses to sell their
  goods and services.
• Freedom of Choice
• - You have the right to buy where and what you
  please.

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Mixed vs. Emerging Economic Systems

• Mixed Economies
• - Complex, they do not fall easily and neatly
  into one category.
• Emerging Economies
• - Directed or controlled economies have not
  prospered and feel the need to transition to
  market economies.

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Chapter 1 - Review

• Give two examples each of needs and wants.
• How are economic resources involved in satisfying
  our needs and wants?
• Name the four economic resources and give an
  example of each.
• Name the six steps in the decision-making process.

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Chapter 2

• What are the three key economic questions that
  every economic system should answer?
• What are the major characteristics of the four
  major economic systems?
• What are the five features of our market economy?
• Explain the mixed vs. emerging economic systems.