Economics Boot Camp

1. Economics Boot Camp By Ms. Chastain 

2. Explain the role of business in society • To create goods and services for consumers • Profits are (hopefully) earned that then circulate money throughout the economy.

3. Distinguish between economic goods & services • Goods – tangible (you can touch it) • Ex. Car, cell phone, pencil • Services – intangible (you can’t touch it) • Ex. Haircut, Car Wash, Yard Work

4. Explain the concept of economic resources • Land: natural resources • Ex. Trees, lakes, coal • Labor: HUMANS working • Ex. Cashier, Teacher • Capital: tools, machinery, robots, etc. • Ex. Cash register, lawn mower, computer • Entrepreneurship: owning a business • Ex. Truett Cathy (owner of Chic-fil-A)

5. Describe the concepts of economic scarcity and economic activities • Scarcity – lack of resources (or not enough stuff) • Fundamental problem of economics • Must be able to distribute scarce resources using different methods • Rationing/Coupons • Money

6. Explain the principles of Supply and Demand • Demand – what consumers are willing to purchase at all available prices • Law of Demand – if the price increases, quantity demanded decreases, and vice versa

7. Explain the principles of Supply and Demand cont. • Supply – what producers are willing to sell at all available prices • Law of Supply: if prices increase, quantity supplied increases, and vice versa

8. Explain the types of economic systems • Traditional economic system: based on customs, rituals, and habits • Usually run by an elder, chief, or medicine man • Jobs are handed down from family members • Do not like change – severe punishment for change • Ex. Amish, Alaskan/Canadian Inuits, Australian Aborigines

10. Explain the types of economic systems cont. • Command Economic System: controlled by a central authority • Usually communist or socialist • Run by a dictator, authoritarian government, or totalitarianism • Jobs are chosen by the government system • Ex. Cuba, North Korea

12. Explain the types of economic systems cont. • Market Economic System: people are allowed to control the system • Usually a democracy style government system • May be led by a President or central government group but they are chosen by the people • Ex. United States, England, Japan

14. Determine the relationship between government and business • Free Enterprise System: businesses are allowed to run freely without much (or any) government control • Modified Free Enterprise System: businesses have a lot of freedom but the government regulates prices, goods sold, services provided, etc.

15. Explain the concept of private enterprise • Private Enterprise: Able to own a businesses without much interference from government • Usually able to sell whatever you wish, hire whomever you want, etc.

16. Identify factors affecting a business’ profit • Consumer Sovereignty: consumers choose all prices, what is sold, how much is sold etc. • Market Failures: a breakdown in the market causing a business to possibly fail • Negative/Positive Externalities: not involved in the situation but affected anyways • Ex. An airport expands = creates new jobs (positive), pollution/traffic/noise (negative)

17. Determine factors affecting business risk • Can be hard to get loans • Hard to find reliable business partners • Hard to find reliable employees • Location • Competition • Hard to actually earn a profit • Inputs may be too expensive

18. Explain the concept of competition • Two or more businesses competing for customers, sales, profit, etc.

19. Explain the concept of productivity • Want to use the least amount of inputs to create the most amount of outputs • Ex. Lemonade Stand • Cheap lemons, sugar, water = Inputs • Sell a lot of lemonade for as high a price possible = Outputs

20. Explain the concept of productivity cont. • Division of Labor: one of the best ways to achieve productivity • Divide up jobs so workers perform fewer tasks • Ford created the assembly line for this purpose