this is to help you

1. Chapter 1

2. Satisfying needs and wants
• Need: Things that are required in order to live
• Wants: Things that comfort and pleasure to
your life
• Good: Things that you can see and touch
• Services: Activities that are consumed at the
same time they are produced

3. OPPORTUNITY COST
• Economic decision-making-process of
choosing which wants, among several
options, will be satisfied
• Tradeoff-when you give up something to have
something else
• Opportunity cost- the value of the next-best
alternative that you did not choose

4. The Decision Making Process
• Define the problem
• Identify the choices
• Evaluate the pros and cons of the choices
• Choose one
• Act on your choice
• Review your decision

5. 3 Economic Questions
• What to produce
• How to produce
• For whom to produce

6. • Command Economy-resources
are owned and controlled by
the government
• Market Economy- resources
are owned and controlled by
the people of the country

7. • Traditional economy-goods
and services are produced the
way it has always been done
• Mixed economy-combines
elements of the command and
market economies

8. • Capitalism-private ownership of
resources by inividuals rather than by
their government
• Competition-rivalry among businesses to
sell their goods and services
• Profit-is the money left from sales after
all of the cost of operating business has
been paid

9. Supply and Demand
• Consumer: A person who buys
and uses goods and services
• Producers: Individual and
organizations that determine
what products and services will
be available for sale

10. • Demand: Quantity of a good or
service that consumers are willing
and able to buy
• Supply: quantity of a good or
service that business is willing and
able to provide

11. •Market price:
point where
supply and
demand are equal