introduction to business © thomson south-western chapter 1 slide 1 lesson 1-3 lesson 1-3 economic...
TRANSCRIPT
Introduction to Business© Thomson South-Western
Chapter 1
Slide 1
LESSON 1-3
Economic Systems
Goals Identify the three economic questions. Differentiate among the main types of
economic systems. Describe the economic system of the
United States.
Introduction to Business© Thomson South-Western
Chapter 1
Slide 2
Key Terms
economic system command economy market economy traditional economy mixed economy capitalism
Introduction to Business© Thomson South-Western
Chapter 1
Slide 3
THE THREE ECONOMIC QUESTIONS What to produce? How to produce? What needs and wants to satisfy?
Introduction to Business© Thomson South-Western
Chapter 1
Types of Economic Systems
Command Economy Market Economy Traditional Economy Mixed Economy
Slide 4
Introduction to Business© Thomson South-Western
Chapter 1
Command Economy
Resources controlled by the government
Government decides what and how goods are produced
How much of the resources will be used How the resources will be used to
produce capital goods
Slide 5
Introduction to Business© Thomson South-Western
Chapter 1
Market Economy
Resources are owned and controlled by the people of the country
The three economic questions are answered
Marketplace is anywhere good and services exchange hands
Slide 6
Introduction to Business© Thomson South-Western
Chapter 1
Traditional Economy
Goods and services are produced the same way they have been for generations Usually used in less developed countries They will consume most of what they
produce, sell/trade/barter the rest
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Introduction to Business© Thomson South-Western
Chapter 1
Mixed Economy
Combination of the command and market economies
Slide 8
Introduction to Business© Thomson South-Western
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Slide 9
TYPES OF ECONOMIC SYSTEMS Command economy Market economy Traditional economy Mixed economies
Introduction to Business© Thomson South-Western
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THE U.S. ECONOMIC SYSTEM Private property Freedom of choice Profit Competition
Introduction to Business© Thomson South-Western
Chapter 1
Private property
A citizen can own, use or dispose of things of value Own anything you want as long as it does
not break the law If you invent something of value you are
protected from others taking your idea
Slide 11
Introduction to Business© Thomson South-Western
Chapter 1
Freedom of choice
You make the decisions independently and you must accept the consequences of those decisions
Slide 12
Introduction to Business© Thomson South-Western
Chapter 1
Profit
The money that is left over after all of the costs of operating the business has been paid
Slide 13
Introduction to Business© Thomson South-Western
Chapter 1
Competition
Consumer have the choice of buying the same product designed and developed by multiple companies Increases the quality of products Decreases the price of products
Slide 14
Introduction to Business© Thomson South-Western
Chapter 1
Slide 15
>> C H E C K P O I N T
Name the four principles of the U.S. economic system.
Introduction to Business© Thomson South-Western
Chapter 1
Slide 16
LESSON 1-4
Supply and Demand
Goals Describe supply and demand orally and
with graphs. Discuss how supply and demand affect
prices of products and services.
Introduction to Business© Thomson South-Western
Chapter 1
Slide 17
PARTICIPATING IN A MARKET ECONOMY Consumers set demand Producers establish supply A graphic view
Introduction to Business© Thomson South-Western
Chapter 1
Slide 18
DEMAND AND SUPPLY
Introduction to Business© Thomson South-Western
Chapter 1
Slide 19
>> C H E C K P O I N T
How does the price of a product affect demand and supply?
Introduction to Business© Thomson South-Western
Chapter 1
Slide 20
DETERMINING PRICE
Factors influencing demand Factors influencing supply Determining market price SUPPLY IS HIGH, DEMAND IS LOW
PRICE IS LOW SUPPLY IS LOW, DEMAND IS HIGH,
PRICE IS HIGH
Introduction to Business© Thomson South-Western
Chapter 1
Slide 21
MARKET PRICE
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Chapter 1
Slide 22
>> C H E C K P O I N T
How is the market price for a product determined?