itb chap 01
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Introduction to Business© Thomson South-Western
ChapterChapterChapterChapter
Economic Decisions and Systems
1-11-1 Satisfying Needs and Wants
1-21-2 Economic Choices
1-31-3 Economic Systems
1-41-4 Supply and Demand
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Introduction to Business© Thomson South-Western
Chapter 1
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LESSON 1-1LESSON 1-1
Satisfying Needs and Wants
Goals Explain the difference between needs
and wants. Distinguish between goods and
services. Describe the types of economic
resources.
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Key Terms
needs wants goods services economic resources
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NEEDS AND WANTS
Needs are essential Wants add to the quality of life Needs and wants are unlimited
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>> C H E C K P O I N T
What is the difference between a need and a want?
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GOODS AND SERVICES
Goods and services for businesses and consumers
The U.S. economy
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>> C H E C K P O I N T
How do people satisfy their wants and needs?
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ECONOMIC RESOURCES
Natural resources Human resources Capital resources Resources are limited
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>> C H E C K P O I N T
What are the three types of economic resources? Give an example of each type of resource.
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Slide 10
LESSON 1-2LESSON 1-2
Economic Choices
Goals Understand the basic economic
problem. Explain the steps in the decision-
making process.
Introduction to Business© Thomson South-Western
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Key Terms
scarcity economic decision-making tradeoff opportunity cost
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THE BASIC ECONOMIC PROBLEM Choices Tradeoffs and opportunity costs
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>> C H E C K P O I N T
What is opportunity cost?
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THE DECISION-MAKING PROCESS1. Define the problem.
2. Identify the choices.
3. Evaluate the advantages and disadvantages of each choice.
4. Choose one.
5. Act on your choice.
6. Review your decision.
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>> C H E C K P O I N T
What are the six steps in the decision-making process?
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LESSON 1-3LESSON 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.
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Key Terms
economic system command economy market economy traditional economy mixed economy capitalism
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THE THREE ECONOMIC QUESTIONS What to produce? How to produce? What needs and wants to satisfy?
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>> C H E C K P O I N T
What are the three economic questions?
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TYPES OF ECONOMIC SYSTEMS Command economy Market economy Traditional economy Mixed economies
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>> C H E C K P O I N T
What are the main differences among the three economic systems?
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THE U.S. ECONOMIC SYSTEM Private property Freedom of choice Profit Competition
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>> C H E C K P O I N T
Name the four principles of the U.S. economic system.
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LESSON 1-4LESSON 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.
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Key Terms
consumer producers demand supply market price
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PARTICIPATING IN A MARKET ECONOMY Consumers set demand Producers establish supply A graphic view
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DEMAND AND SUPPLY
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>> C H E C K P O I N T
How does the price of a product affect demand and supply?
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DETERMINING PRICE
Factors influencing demand Factors influencing supply Determining market price
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MARKET PRICE
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>> C H E C K P O I N T
How is the market price for a product determined?