Economic Terms Economic products goods and services that are relatively scarce and transferable to others Good A specific item that you buy Service Work performed for someone Consumer a person who uses goods and services to satisfy wants and needs ID: 623099
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Basic Economic ConceptsSlide2
Economic Terms
Economic products: goods and services that are relatively scarce, and transferable to others.Good: A specific item that you buy.
Service: Work performed for someoneConsumer: a person who uses goods and services to satisfy wants and needs.Slide3
Types of Goods
Consumer good: Intended for final use by individuals.TV for personal useA personal cell phone.
Capital good: goods produced for the purpose to be used in the production of other goodsRaw lumber to be used to build tables.A computer in a High SchoolSlide4
Value
What do Americans consider valuable?
Value refers to the worth that can be expressed in dollars and cents.Slide5
Why are some needs not expensive?
Its called the Paradox of Value
.The concept at which necessities, such as Water, has a low monetary value.However, non-necessities, such as diamonds, have a high monetary value. Slide6
Paradox of Value
In order for something to have value it MUST be scarce.Even though we need water to survive, it’s so plentiful in most areas that it has little or no monetary value.
Diamonds, on the other hand, are very scarce than therefore more valuable.Slide7
Utility
Also for something to have value it needs to be useful and provide satisfaction.It’s hard to say how useful something is, it depends on the person to determine how valuable the item is.
For something to have value it must be scarce AND usefulSlide8
Wealth
What makes a person Wealthy?In the economic sense, wealth is the accumulation of items that are tangible, scarce and useful.Slide9
Market Types
General Market: a location or other mechanism that allows buyers and sellers to conduct market transactionsFactor Market: Markets
where people go to work to produce goods.Product Market: Markets where goods are sold to individualsSlide10
Economic Growth
Economic Growth: Happens when a nations output of goods and services increases over time.Several factors lead to economic
growthInvesting in human capitalDivision of LaborSpecialization
ProductivitySlide11
Investing in Human Capital
Often times companies will pay for training or higher education as long as you agree to work for their company for X number years.Governments will support educational programs to ensure they are getting the best minds then can within their borders.Slide12
Division of Labor
Happens when work is arranged so that individual worker do fewer tasks then before.This allows workers to become specialized in areas of their job.Slide13
Specialization
Specialization is not limited to an individual worker.Often times regions of a country will specialize in a particular product
“Steel Belt” In the Great Lakes Area.Oil Industry in most of Texas.Farming in the Mid-west
Coal Production in Virginia and West Virginia Slide14
Productivity
The most important factor of economic growth.Yet this key hinges on the above three.
In order to produce more jobs, items must be bought to increase demand.
Once demand is up then a company needs to produce more
and more jobs are created.
As Consumer wealth increases, consumers tend to buy more stuff, boosting the profits of business.Slide15
Economic Interdependence
We live in a Globalized society, meaning that countries rely on each other to survive. Events in one part of the country or half a world away can have an impact on the modern global society.
EX: gas prices rose sharply when Katrina hit the gulf coast, in addition to the other storms that were active that year. The price stayed high until supply was able to catch up to demand.