economics. what is economics? economics: the branch of social science that deals with the production...
DESCRIPTION
What questions do economist ask? What to produce? How to produce? For whom to produce?TRANSCRIPT
Economics
What is Economics?
Economics: the branch of social science that deals with the production and distribution and consumption of goods and services and their management
What questions do economist ask?
What to produce? How to produce? For whom to produce?
Scarcity
Scarcity: condition where human wants are greater than the available supply.
Time Goods Labor Capital Resources
Land & oil
Price
What happens to price when items are scarce?
Price
What happens to price when items are scarce?
Production
the making of goods available for use – Resources are turned into goods & services
• Resources– Natural resources– Labor– capital
distribution
the act or process of distributing the marketing of goods How does the consumer get the goods or
services?– Movement– Who decides?
consumption
the act or process of consuming the amount consumed Satisfying our needs and wants by choosing
goods & services– consumer
4 Types of Markets
Economic Markets Traditional Command Mixed Free (market economy)
Traditional Economy
• Economic System that answers economic questions the way they have always been answered
– Primitive tribe– Ainu in Japan– Native Brazilians (rain forest)– Amish
Traditional Economy
• Strengths• Minimizes problems
within society
• Weaknesses– Restricts
individuals– Lacks
advancements– Lacks new
technology– Lacks economic
growth
Market Economy
• Economic is a system based on private ownership, free trade, competition
– Price is determined by supply & demand– Also known as
• Free Market• Capitalism
• Example: United States
Market Economy
• Strengths– Freedom
• Buy & sell• Entrepreneurship• Advancements
– technology
Command Economy
• Is a system in which the central government makes all economic decisions.
– Government answers these questions• What good to produce?• How much goods to produce?• What price will be charged?
– Examples:• North Korea & Cuba
Command Economy
• Owns & controls most businesses• People do not have a say• Regulate the market
– Control• Production & Distribution of goods & services
Mixed Market
• An economy that uses elements of both the command & market economic systems
– Example is China
• Includes – Government purchases– Employment– Taxation– Redistribution– regulation
Market Economhy