Chapter 6

1. Chapter 6

2. Objectives • Explain why individuals and nations must make economic choices. • Give an example of an opportunity cost. • Describe what an economic system does. • List the three major economic inputs and give an example of each.

3. Objectives • Explain why infrastructure is important to an economic system. • Describe the benefits of advanced technology.

4. scarcity opportunity cost economic system economic inputs economic outputs land natural resources labor entrepreneurship capital capital goods final product infrastructure technology advanced technology Marketing Terms

5. Scarcity • Scarcity • not enough resources • to meet needs • affects individuals and nations 1. Give examples of scarce resources.

6. Scarcity • Some resources • water • trees • oil • A resource can be used only once • oil used to fuel a car cannot be used to heat a home

7. Scarcity • Money is also a scarce resource • the money you spend on one thing • cannot be spent on something else • example: the money you spend on food and snacks • cannot be spent on new clothes • The opportunity cost of a decision is the value of the item you did not choose (for example: the opportunity cost of buying a one dollar candy could be a one dollar pen that you did not buy based on your decision)

8. Scarcity • The opportunity cost of • the decision to buy dinner at a restaurant • is the cost of the clothes you did not buy #2 Give an example of Opportunity Cost.

9. An Economic System • A system accomplishes a task with these three parts • inputs • a mechanism • outputs • The purpose of most systems is • to produce the outputs

10. An Economic System • An economic system • is developed by a nation • to turn its resources into products • An economic system consists of • economic inputs • a mechanism • economic outputs

12. An Economic System • Economic inputs • resources used to make products • Mechanism • the process of production • Economic outputs • goods, services, and ideas 3. Name some economic outputs of theUnited States economy.

13. Economic Inputs • Economic inputs are • the resources used to make products • Three categories of economic inputs • land • labor • capital #4 Think of a product you use. What resources were used to make this product?

14. Economic Inputs

15. Land • Land • includes all of a nation’s natural resources • Examples • soil, water, minerals, plants, animals, and climate

16. Land • Natural resources are • scarce • unequally distributed among nations #5 What natural resources are scarce in the United States?

17. Labor • Labor • the people who make products • Labor includes • workers’ levels of education, skills, and productivity

18. Labor • Entrepreneurship is the • ability to start new businesses • Risk Takers • An economy with many successful entrepreneurs • is usually a successful economy

19. Capital • Capital • manufactured products • used to make other products • Capital goods is another term for capital • because capital consists of • goods used to make other goods

20. Capital • A final product is a good • that is purchased by a consumer • examples: cars, clothing, shoes, refrigerators, and books • Capital goods are used to make • final products #6 Name some final products that you buy.

21. #7 What final products might be made using these examples of capital goods?

22. Capital • The term capital is also used as the short form for the term • financial capital • Financial capital is the money used to buy capital goods • So the term capital can refer to • capital goods (machinery, etc.) or • money used to buy capital goods

23. Infrastructure • Infrastructure • necessary for a modern economy • includes transportation systems and utilities

24. Infrastructure • Transportation systems • highways, bridges, railroads, public transportation, seaports, and airports • Utilities • sanitation systems, electric power plants, water systems, and telephone service #8 Describe examples of infrastructureyou have used today.

25. Technology • Technology • use of tools • to improve human life

26. Technology • Early technology • simple machines • machines powered by people or animals • Advanced technology • industrial technology • steam and combustion • digital technology • electricity used to control data

27. Review • What are the three parts of a system? • Name the three categories of economic inputs. • What is the difference between capital goods and final products? • Define infrastructure and give examples. • How does technology affect human productivity?

28. Glossary Back • advanced technology. Industrial and digital technologies. • capital. Any manufactured product used to make another product; includes machinery, buildings, vehicles, and computers; also can refer to the money used to buy capital.

29. Glossary Back • capital goods. Manufactured products used to make final products. • economic inputs. Resources used to make products. • economic outputs. Products (goods, services, and ideas) produced by an economic system.

30. Glossary Back • economic system. The system that a nation has developed to turn its resources into products that satisfy needs. • entrepreneurship. The willingness and ability to start a new business.

31. Glossary Back • final product. Consumer product, that is, a product purchased by consumers. • infrastructure. The transportation systems and utilities necessary for a modern economy. • labor. Workers; the people who turn resources into products; also called human resources.

32. Glossary Back • land. All the natural resources that a nation has. • natural resources. Raw materials; examples include soil, water, minerals, plants, animals, and climate. • opportunity cost. Value of the opportunity you did not choose.

33. Glossary Back • scarcity. Condition in which there are not enough resources to meet needs. • technology. Use of tools to improve human life.