unit 1 needs and wants supply and demand effects on the economy
TRANSCRIPT
Unit 1 Needs and Wants• Supply and Demand
• Effects on the Economy
Vocabulary• Need
• Want
• Goods
• Service
• Resource
• Scarcity
• Factors of production
• Economics
• Equilibrium price
• Types of economies
• Inflation
• Deflation
• Recession
• Depression• GDP• Deficit• Debt• Surplus• Business cycle• Ethics• Sweatshops• OSHA• Social Responsibility• FDA• Equal Pay Act• EPA
What is a Need and a Want?
http://itp.nyu.edu/~alo244/what_do_need_and_want.jpg
Four Factors of Production /Resources
• Natural resources
• Human resources
• Capital resources
• Entrepreneurial resources
Scarcity -
• Do you believe that the world is likely to run out of oil?
• 2. If we're really not running out of oil, why do so many media reports encourage people to believe we are?
Quiz?
• What is the meaning of scarcity
• Name a scarce resource
• What is a natural resource
• What is a human resource
Define EconomicsDefine Economics
The study of how society chooses to use resources to produce and distribute goods and services for people’s consumption.
The basis of business is also the study of economics. Businesses look at people’s wants and needs and then decide whether to supply the demand.
Supply and Demand in a Market system
Supply is controlled by the business
Demand is generated by the consumer
http://www.nonstopmac.com/images/ipod-touch.jpg http://www.synthtopia.com/content/wp-content/uploads/2007/04/flash-mob.jpg
Pric
e
Quantity Purchased
Supply Curve
Demand Curve
Demand curve is based on price. The higher the price the Lower the amount demanded.
Supply curve is based on price.The higher the price the moreA business is willing the sell.
10
100 1,000
20
Equilibrium Price
Types of Economics Systems
• Command Economy– Communism
• Socialism
• Market Economy
• Mixed Economy
Economies
• Command - Government controlled• 1.Strong – communism – government
makes all economic decisions
• 2. Moderate – socialism – some private business – some government controlled
• Free Market - Capitalism, resources are privately held.
• Mixed – most countries fall under this. Partial use of both free and command.
• Will we ever go back to living like this?
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Economic Indicators
• GDP
• Unemployment
• Housing
• Rate of Inflation
• National Debt
GNP or GDP
• Both of these indicators reflect the sum of goods and services.
• GNP - includes profit by businesses operating outside the country- Nike in South America
• GDP- includes business done by foreign countries inside our borders- Nissan Titan
Five Factors that affect GDP
• Population
• Entrepreneurialism
• Trade
• War
• Natural resources
Turn to your neighbor and give them one reason why
each of the indicators would be good for the economy.
Have your neighbor tell you one reason why that indicator is bad or brings the economy
down.
Business Cycle
• Prosperity
• Recession
• Depression
• Recovery
• **Book page 40***
Business Ethics and Social Responsibility
Goal of Business is to make a
• Profits before social welfare?
profit.
• When a business is tempted to put profits before social welfare there is a conflict of interest
What is Business Ethics?
• Businesses have an ethical obligation to provide safe product, create jobs, protect the environment, and contribute to the standard of living.
Business Ethics
Human Relations•Hiring•Firing•Unions•Diversity
People Factor
Land FactorSociety Factor
Law Factor
Govern Regulations•Working within the law•Operating a business w/ others fairly
Environmental•Pollution control•Recycling
Community Involvement•Giving to the community•Sponsoring events
For any business to be successful, it must operate legally and humanely.
• Shirtwaist Factory, New York City• Sweatshops good or bad?
• Levi Strauss
List under headings companies which act responsibly and/or ethically and those who do not.
• Johnson & Johnson 1982 – Tylenol recall $100 mill
• Ford/Firestone 1999 – Jeep recall
• Post – Contributes a percentage of purchase to the Boys and Girls Club of America
• GM – 30% reduction of waste
Boycotts
• How do boycotts affect supply and demand?• Do boycotts help or hurt?
Ways to use ethics in business
• Quality product at a fair price– Repeat customers – good reputation
• Follow government regulations– If not – Jail or fines
• Employee relations– Less dissatisfaction - less turn-over of skilled
labor
Government aids for social responsibility• FDA – protects consumers from dangerous
or falsely advertised products.
• Equal Pay Act – men and women should be paid the same for doing equal work.
• EPA – protects environment and controls pollution
• OSHA –protects employees from unsafe work environments.