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UNDERSTANDING ECONOMIC SYSTEMS

CH 1.3. UNDERSTANDING ECONOMIC SYSTEMS. 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:

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UNDERSTANDING ECONOMIC SYSTEMS

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  1. CH 1.3 UNDERSTANDING ECONOMIC SYSTEMS

  2. 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.

  3. Supply and demand graph

  4. CAREER SIMULATION

  5. 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

  6. 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

  7. 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)

  8. CH 1.5 5 TYPES OF ADVERTISING

  9. 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?

  10. celebrities!

  11. Product placement • Putting brand name items in a movie for everyone to see!

  12. Product placement…. • How many items do you see?

  13. 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!

  14. http://www.youtube.com/watch?v=23zGquwJfbw&feature=related

  15. COMPARATIVE ADVERTISING • A comparison of one product to another (competitor) • Try to exploit the competitor’s weakness

  16. comparative advertising

  17. 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

  18. PERSUASIVE ADVERTISING • Ads try to appeal to emotions of the consumer • Their product will make you happy, successful, popular, etc…

  19. Persuasive advertising

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