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Guest speaker-Ms. Rusnack from the Art Institutes Pick up a study guide-on table –start on pg. 1 and 2 Check pg. 1 and 2 Work in pairs on pg. 3 +. AGENDA. ECONOMICS Final-vocabulary review. UNIT 1 Basic Economic Concepts.
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Guest speaker-Ms. Rusnack from the Art Institutes Pick up a study guide-on table –start on pg. 1 and 2 Check pg. 1 and 2 Work in pairs on pg. 3 + AGENDA
The economic system where there is private ownership, consumer sovereignty, and minimal government involvement Free-market economy
Things that excite or motivate people to change their economic behavior Incentives
What is given up in order to get something Opportunity cost
The most common type of economic system—combining free-market and command economies Mixed-market economy
Things that can be grown or manufactured, then bought or sold Goods
The using (up) of goods and services Consumption
A limited supply of resources in comparison to unlimited wants and needs—it forces trade-offs Scarcity
Selecting an item or action from a set of alternatives Choice
Something a person or business does for someone else in exchange for money or value Service
The degree of availability of an item or service—how much there is available to consume Supply
Things required for survival—food, water, shelter, etc. Needs
Provided by nature, such as raw materials, land, or air Natural resources
Rivalry between producers or sellers, resulting in a better quality good/service and/or lower price Competition
Effort or work of producers; labor Human resources
Things consumers would like to have such as cars, TV’s, and jewelry Wants
The three basic questions any society/economy must ask— 1. What will be produced (and how much)? Who will produce it? For whom will it be produced?
The three kinds of resources within the factors of production— 1. Human resources Natural resources Capital resources
Who are the business owners and risk takers that combine resources needed for production? Entrepreneurs
Traditional economy Basic economic questions answered by history/tradition Command economy • Basic economic questions answered by the government • Government owns all factors of production • No consumer choice Free Market economy • Basic economic questions answered by consumers/producers • Private property ownership • Minimal government control Mixed Market economy • Free market economy with a government making decision for public sector, businesses/consumers making decisions for private sector
The quantity of a good or service that consumers are willing and able to buy at various prices Demand
The quantity of a good or service that producers are willing and able to offer for sale at various prices Supply
An economic law stating that as prices of a good or service increases, the quantity demanded decreases ( and vice versa). Law of Demand
An economic law stating that as prices of a good or service increases, the quantity supplied increases ( and vice versa). Law of Supply
A product that satisfies the same basic want as another product—Coke or Pepsi. Substitute good
A product that is used or consumed jointly with another product—PB & J. Complimentary good
The measure of the degree of change in quantity demanded or supplied in response to change in price. Elasticity
A minimum price set by the government to prevent prices from going too low. Price floor
A maximum price set by the government to prevent prices from going too high. Price ceiling
What is given up by adding one more unit to an activity. Marginal cost
What is gained by adding one more unit to an activity. Marginal benefit