Journal

1 paragraph, 4 sentences

Topic: In your own words, please explain what economics is and how it affects you in your personal life.

(You will probably have to do a little research to find out what economics is. )

Economics

What is Economics?

Economics – the study of production, consumption, and sales of products.

Economy - is how people distribute scarce resources to produce various commodities (products) and how those commodities are distributed for societal consumption

Activity

What is your own definition of economics.

Share

Impact of Economics

in a stable and expansive economy, people will spend more and have more jobs opportunities

in an unstable and slow economy, unemployment rates will be high and jobs will be harder to find

What do you think? Write down how economics might

affect your future career.

Economic Resources

• Resources are anything used to make goods or services, also called factors of production

• They are scarce and cannot meet all human wants and needs

human necessities include goods and services we cannot live without

human wants include every other type of goods and services we

may want but do not need examples: need: open heart surgery want: liposuction

Four Factors of Production

1. Land natural resources found on earth earth or seas

2. Labor human resources includes all people who work within an economy

3. Capital monetary resources needed to start and operate a

business goods used in the production process

4. Entrepreneurship involves human skills required to start and run a

business organizes the other three factors to create economic

goods and services

Economic Utility

Is the value added to a product or service by the role of marketing

Includes these five types: time utility place utility form utility possession utility information utility

Utility means customer satisfaction

8

Time Utility

Enhances value by having a product or service available to consumers during a certain time of day, week, month or year

Examples include: stores staying open after 5 p.m. for those who work

during the day retailers providing gift wrapping during the holiday

season

9

Place Utility

Enhances value by placing products or services in easily accessible locations for consumers

Examples include: banks placing ATMs outside of convenience stores,

stadiums, theaters, etc. restaurants providing delivery or curbside pickup

10

Form Utility

Enhances value by creating more useful or desirable products out of raw materials or separate parts

Examples include: grocery stores selling frozen or fresh pre-prepared

meals car manufacturers installing a CD player in a

car retailers selling bundles of products which

complement each other

11

Possession Utility

Enhances value by allowing for easy use by consumer or transfer of ownership to consumer

Examples include: retailers providing layaway or financing for large

purchases property owners renting to those who prefer not to or

cannot afford to purchase a home Forms of payment-cash, credit, lease

12

Information Utility

Enhances value by supplying consumers with information

Examples include: informed sales staff describing a product’s features

and benefits advertising informing consumers about a new product retailers offering a lesson on how to most effectively

use a product

13

Activity

Journal

1 paragraph, 4 sentences

Topic: What does utility mean in regards to what you learned yesterday? Please explain 3 of the 5 utilities.

Basic Economic Systems

Capitalism - USA

Socialism – everyone works according to his/her ability. Everyone is given what he/she needs according to his/her contribution.

Communism – everyone works according to his/ her ability. Everyone is given what he/she needs no matter how he/she contributed.

Capitalism

An economic and political system in which a country's trade and industry are controlled by private owners, as opposed to the government, for profit.

Capitalism

an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market

http://www.merriam-webster.com/dictionary/capitalism

Capitalism

a way of organizing an economy so that the things that are used to make and transport products (such as land, oil, factories, ships, etc.) are owned by individual people and companies rather than by the government

http://www.learnersdictionary.com/search/capitalism

Basic Principals of Capitalism

Free Enterprise System - An economic system where few restrictions are placed on business activities and ownership.

Read more: http://www.investopedia.com/terms/f/free_enterprise.asp#ixzz27mmjvPZn

Freedom of Ownership

Citizens who live under a free enterprise system are free to own personal property.

Intellectual property – ideas. You must get a patent in the U.S. to protect your property.

The use of patented material requires permission from the owner.

What does this mean?!?!?!?!!?!?!

Example

If you want to make a shirt to advertise something but you wanted to use a logo, you would have to get permission.

y soup!!!

Please buy

Competition

This is the fueling force behind the free enterprise system. Without competition in the marketplace, there would be no incentive to develop a better and more of a cutting edge product.

Without competitions we have a and monopolies are bad!

Price Competition

The focus of the sale price of a product. The thought is that if everything about the

product is equal in two different stores, the customer is going to buy the product that is less expensive.

Nonprice Competition

Quality, Service, Financing

Monopoly

A company with EXCLUSIVE control over a product or a piece of the market.

Examples: local cable service, local water services, electric companies used to be

Monopolies are not permitted in free enterprise because they stop competition.

Risk vs. Reward

Risk implies the potential for loss or failure. Reward is the benefits reaped. Companies must calculate whether or not the

risk is worth the reward.

What are some examples of taking risks?

Profit

Money earned after an exchange.

Profit = Revenue - Cost

The Role of the Government

Provider of ServiceSupporter of BusinessRegulatorCompetitor

Provider of Service

Also, the government is responsible for the social welfare system and providing Medicare and Medicaid.

Supporter of Business

Disaster assistance - FEMA Small Business Administration – set up to

provide educational materials to small business owners for success.

Largest consumer of goods (U.S. made) – military and defense materials.

Establish trade alliances - maintains relationships with foreign countries to ensure trade

Regulator - Law Maker

Set up agencies toprotect workers

and consumers. EX:

FDA EEOC OSHA CPSC

Protect private property rights.

EX: PatentsTrademarks

Sherman Antitrust act (Monopolies)

Competitor

U.S. Postal Service competes with UPS and Fed EX

TVA provides electricity to rural areas in the South, competes with electric companies

National Parks and Campgrounds compete with privately owned tourist attractions.

Role of Consumer

Deciding which businesses survive Determining prices

Business Survival

Consumers keep businesses in business. How?!?!

Socialism

a transitional stage after the proletarian revolution in the development of a society from capitalism to communism:  characterized by the distribution of income according to work rather than need

Socialist believe that capitalism oppresses the lower class

Communism

a theory or system of social organization based on the holding of allproperty in common, actual ownership being ascribed to thecommunity as a whole or to the state.