Intro To Business, Ch. 1
Published on Nov 18, 2015
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MORE DECKS TO EXPLORE
PRESENTATION OUTLINE
NEEDS & WANTS
- Needs are ESSENTIAL
- Wants ADD to the quality of life
- Needs & Wants are UNLIMITED
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US ECONOMY
- Largest PRODUCER of G+S in the world
- Also the largest CONSUMER in the world
- As spending increases, jobs are created
- The result is a higher STANDARD OF LIVING
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...also called Factors of Production
- Natural Resources (Land)
- Human Resources (Labor)
- Capital
- Entrepreneurship
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Natural Resources
Raw materials supplied by nature
Human Resources
The people who produce G+S
Capital
The products and money used in the production of G+S
Entrepreneurship
The risk-taker who uses resources to create new G+S
ECONOMIC CHOICES
- SCARCITY is the basic economic problem
- Individuals & Businesses have unlimited W+N
- But there are limited economic resources
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SCARCITY
- Forces trade-offs...
- What you'll have to give up
- Forces you to consider...
- The OPPORTUNITY COSTS...
- The value of what you didn't purchase
Photo by Esthr
ECONOMIC QUESTIONS
- What G+S will be produced
- How will the G+S be produced
- Who will the G+S be produced for
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ECONOMIC SYSTEMS
- Command > owned/controlled by gov't
- Market > owned/controlled by people
- Traditional > how it's "always" been done
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MIXED ECONOMIES
- Combine elements of Command & Market
- Most economies in today's world
- Including the United States
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US ECONOMIC PRINCIPLES
IN A MARKET ECONOMY
- Consumers set demand
- Producers establish the supply
- As prices decrease > quantity of demand increases
- As prices increase > producers are willing to supply more
- Work for $5 per hour vs Work for $100 per hour
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PRICE BASED ON DEMAND
- When customers want something
- Prices will go up
- When customers have alternatives
- Prices often go down
Photo by dying regime
PRICES BASED ON SUPPLY
- When there are a lot of the same products
- Prices tend to go down
- When there is competition, fight for customers
- Prices tend to go down
Photo by rafael-castillo
PRICES BASED ON SUPPLY
- But when there are unforeseen disasters
- Oil, gas, water supply is disrupted
- Prices will go up
Photo by jk+too
MARKET PRICE
- When supply/demand are equal
- Determined by supply, demand, competition
- Also referred to as the "equilibrium"
Photo by Greg Woodhouse Photography
