Louisiana’s Economy

1. Louisiana’s Economy Resources and Rewards

2. Basic Economic Concepts Section 1 - Vocabulary

3. Define goods Goods are physical items List examples of goods • Food • Books • Television • Car • House • Clothes

4. Define services Services are activities people do for a fee. List examples of people who perform services • Teacher • Postman • Hair Stylist • House Painter • Musicians • Mechanic

5. Define consumer A consumer is a person who satisfies a want or need by buying a good or service. Define producer A producer is a person or business who uses resources to make goods or provide services.

6. Look at the pictures below. Discuss the consumer and producer from each picture.

7. Define natural resource Natural resources are gifts from nature Define human resource Human resources are people who produce goods or services Define capital resource Capital resources are the money and property

8. Discuss the three types of resources found in the photograph below.

9. Define scarcity Scarcity means that people want or need more than the available resources can supply. Discuss what happens after a big hurricane. Everyone needs to fix the damages on their homes. People begin to purchase items from the lumber yard. How does scarcity effect this situation.

10. Define opportunity benefit Opportunity benefit is the item purchased or chosen or the value of the item purchased or chosen when a choice is made Define opportunity cost Opportunity cost is the item you did not choose or the value of the next best alternative given up when a choice is made

11. You go to the mall with $60. Make a choice on the items you will purchase. Now explain which item(s) are opportunity cost or opportunity benefit. $10 $40 $20 $35 $15

12. Define supply Supply is the quantity of goods or services offered for sale Define demand Demand is the quantity of goods or services people are willing and able to buy

13. Discuss what happens if the everyone in the town of Abbeville goes to McDonald’s on the same day at the same time and orders the exact same thing. What does this have to do with supply and demand?

14. Define profit Profit is the amount left after costs are subtracted. Price Item Sold for – Cost to Make Item = Profit

15. Define traditional economy Traditional economy customs, beliefs, and habits determine how the four basic questions are answered. What to produce How to produce How much to produce For whom to produce

16. Define command economy Command economy the government controls the economy and answers the four basic economic questions What to produce How to produce How much to produce For whom to produce

17. Define market economy Market economy individuals answer the four basic economic questions based upon supply and demand. What to produce How to produce How much to produce For whom to produce