What is Economics?

1. What is Economics? • Economics studies the Production, Consumption, and Distribution of _____________ goods and services for a society with __________ wants and _________. scarce unlimited needs

2. What is Economics? • Basic questions answered by an economic system • Production (what is produced) • ________________ (things used to make goods and provide services)- Tools, Natural Resources, Human Resources) • ___________ (What are the needs or wants) • Consumption (how much is produced) • ______________ • _____________ Resources Demand Resources Demand

3. What is Economics? • Basic questions answered by an economic system • How are goods produced? • Capital- ____________ to get started and ______________ needed to make product • ______ and _________ Resources- materials to make good and energy to support production • ____________- Workers • _____________- People who plan and supervise the production money equipment Land Natural Labor Management

4. What is Economics? • Basic questions answered by an economic system • Distribution (for whom are the goods produced) • Marketing • Getting the product to the ______________ • Advertising • Selling • ______________ consumer Storage

5. Scarcity • Limited supply of resources • Requires trade-offs or ____________ • What you don’t choose, in favor of something else choice

6. Opportunity Costs/Incentives • Limited supply of resources • ____________ costs • The ________ value of the good or activity you ________ in favor of something else • Incentives • ___________ the selection/trade-off Opportunity highest Gave up Influence

7. Economic systems • Free Market (buying/selling) Economy • Individual _______________ • People have the freedom to _________ the product they want • ________ sovereignty • the individual consumer make economic _________________ (buy/sell/produce) • _______________ • people to start businesses to make ________ Choice choose Consumer decisions Profit profit

8. Economic systems • Free Market Economy (cont) • _______________ • Businesses are free to _________________ with others • ________ ownership of property/resources • Individuals _________ the means of production Competition compete Private own

9. Economic systems • Command Economy • Centrally planned economy • Government makes ____ economic decisions • Decides what, how many, how, and who gets it • Central ownership of property/resources • __________________ provides necessary raw materials, money, and labor • Lack of consumer choice • The ___________________has little influence in economic decisions all Government individual

10. Economic systems • Command Economy • Pros • Government can set the _________ of goods • Consumers are assured ___________ when they are available • Cons • No _______________ • No ____________ • Goods may be ___________ made • Individuals have little economic ___________. They must _______ where the government tells them. prices goods competition choice poorly freedom work

11. Economic systems • Mixed Market Economy • Most ___________ economic system in the world • ____________ and ____________ act as decision makers in the private sector • ______________ acts as the decision maker in the public sector • Areas such as roads, mail, water, police, military common Individuals Businesses Government

12. Economic systems • Mixed Market Economy (cont.) • ___________ government role than in the Free Market Economy • Government monitors to prevent businesses from cheating or abusing workers and consumers, making sure products are safe, protecting the environment • ______________ • __________ and ____________ Greater Incentives Supply Demand

13. Entrepreneurs • People who start new ____________ • ____________ their ________ and _______ to build a _________ business • __________- Reward of success businesses Risk money profitable time Profit

14. Forms of Business Organization • Sole Proprietorship • ______ owner who ___________ the business, income, assets, and risks. Usually _________ businesses (restaurant, beauty parlor, gas station) • Pro- You’re the ______. Get to decide what to do, ______, charge, make or _____, hours to work • Con- You take all the _______. You provide all the _________, pay the bills, hire and fire. If the business fails you lose ______ you put into it. One controls small boss buy sell risks money all

15. Forms of Business Organization two • Partnership • Business which _______ or more people own. • Pro • People can pool their ______________ if they don’t have enough individually • Can ___________ different skills, share the workload, duties and decisions • Con • If business fails each partner is ____________ for the ____________ amount of the loss • __________________ between partners. May have to be solved in __________ Money/capital combine responsible total Disagreements court

16. Forms of Business Organization • Corporation • A large business that has many ________. • A corporation is treated as an __________. • Sells shares of ownership called __________. • People who buy shares are called _________________. • Stockholders _____________ in company profits and risks. owners individual stock shareholders share

17. Forms of Business Organization • Corporations • Pro • Many people/shareholders ________ the risk • Limited _________- Shareholders only risk the money they ________. They are not responsible for all the ___________ of the corporation. • Shareholders have a say in how the business is run __________ their shares. The more shares you own the more ____________ you have • Con • May _________ the money you invested share liability invest debt By voting votes lose