The Wonderful World of…. MONEY!

1. The Wonderful World of….MONEY!

2. Economics • The study of how goods and services are produced and distributed

3. Sellers • A person or company who sells goods or services • Examples: • Sports Authority SELLS sporting equipment • Publix SELLS groceries • A baker SELLS baked goods

4. Buyers • A person or company that buys/purchases goods or services • Examples: • A person BUYS a haircut • A clothing company BUYS cotton from a farmer in order to make clothes

5. Specialization • To dedicate one's attentions to a specific pursuit or field of study • Example: • A farmer specializes in growing a large amount of a few foods, instead of growing a small amount of a lot of foods.

6. Trade • Exchanging or buying and selling goods • Examples: • A woman trades money with a movie theater in order to watch a movie • A farmer trades some of his tomatoes for another farmer’s lettuce

7. Technological Advancement • Creating and updating technology in order to make companies more productive and decrease costs • Example: • Apple created an iPhone which allows consumers to work from anywhere in the world, instead of having to be sitting at a computer

8. Business Productivity • A measurement of how effectively companies turn their ideas into goods and services • The more productive a business is, the more profit they can earn • Technological advancements helps companies be more productive • Example: • The creation of trains helped businesses sell to places further away, which increased their profits

9. Decision-Making • Deciding which choice is best to choose • Example: • A shopper decides to buy an Xbox instead of a Wii

10. Opportunity Cost • the cost we pay when we give up something to get something else • Example: • If you have $5, you can either buy candy, or you can save it for a new video game (If you choose candy, then you have given up using the money towards the video game)

11. Standard of Living • A level of material comfort in terms of goods and services available to someone or some group • Example: • Most people in the United States have a car, but in some other countries, citizens use bicycles to get around

12. Voluntary Exchange • Trade between individuals • Example: • Selling whale oil helped both whalers who earned money, and the townspeople who used whale oil for lamps

13. Economic Activity • Getting other people to voluntarily do things for you • Example: • If I order a pizza delivered to my house, then other people make the pizza and transport it to my door. Last night, when I made a pizza myself, there was less economic activity. However, I still used prepared foods that I bought from a store, including a pre-made crust, a jar of tomato sauce, and already-grated cheese. Somebody else made the oven that I used, as well as the kitchen utensils. There would have been even less economic activity if I had made the crust myself using flour and yeast, made the sauce from tomatoes and spices, and grated fresh cheese. There would have been even less economic activity if I had used tomatoes and spices that I had grown in the back yard. etc.

14. Price Incentives • When price affects the decisions people make • Examples: • Georgia had a climate and type of land which was beneficial for growing rice, so farmers grew rice to earn money • A shopper chooses California grown avocados instead of Florida grown avocados because California avocados are cheaper

15. Personal Budget • A plan for spending and saving, and helps people make decisions to be sure they have enough money for the things they want most • Example: • A family creates a budget in order to save money for Christmas presents

16. Spending • Using money you have earned to purchase goods and services • Example: • Dad spends his money on a new set of golf clubs • You spend your money on a new toy

17. Saving • Keeping the money you earned in order to spend it later on something you want • Examples: • Putting your allowance in the bank in order to have enough money for college • Keeping your money to purchase a new car