To create goods and services for consumers Profits are (hopefully) earned that then circulate money...
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Transcript of To create goods and services for consumers Profits are (hopefully) earned that then circulate money...
![Page 1: To create goods and services for consumers Profits are (hopefully) earned that then circulate money throughout the economy.](https://reader035.fdocuments.net/reader035/viewer/2022062517/56649eab5503460f94bb07e4/html5/thumbnails/1.jpg)
Economics Boot Camp
By Ms. Chastain
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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.
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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
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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)
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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
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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
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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
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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
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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
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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
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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.
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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.
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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)
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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
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Explain the concept of competition
Two or more businesses competing for customers, sales, profit, etc.
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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
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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
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