Economics is a Way of Thinking Economic Question Factors of Production Economic Market Different...
-
Upload
lesley-reeves -
Category
Documents
-
view
214 -
download
0
Transcript of Economics is a Way of Thinking Economic Question Factors of Production Economic Market Different...
![Page 1: Economics is a Way of Thinking Economic Question Factors of Production Economic Market Different Economies.](https://reader036.fdocuments.in/reader036/viewer/2022082713/5697bfba1a28abf838ca094e/html5/thumbnails/1.jpg)
Economics is a Way of Thinking
Economic Question Factors of Production Economic Market Different Economies
![Page 2: Economics is a Way of Thinking Economic Question Factors of Production Economic Market Different Economies.](https://reader036.fdocuments.in/reader036/viewer/2022082713/5697bfba1a28abf838ca094e/html5/thumbnails/2.jpg)
Basic Economic Questions:
All economic decisions are constrained by scarcity (limited resources). We are forced to make certain decisions…
![Page 3: Economics is a Way of Thinking Economic Question Factors of Production Economic Market Different Economies.](https://reader036.fdocuments.in/reader036/viewer/2022082713/5697bfba1a28abf838ca094e/html5/thumbnails/3.jpg)
3 Basic Economics Questions:
1. WHAT goods and services will be produced?
2. HOW will those goods and services be produced?
3. FOR WHOM will they be produced?
![Page 4: Economics is a Way of Thinking Economic Question Factors of Production Economic Market Different Economies.](https://reader036.fdocuments.in/reader036/viewer/2022082713/5697bfba1a28abf838ca094e/html5/thumbnails/4.jpg)
Factors of Production
Scarcity forces the economic questions (limited resources); resources are the
basic elements used to produce goods/services.
![Page 5: Economics is a Way of Thinking Economic Question Factors of Production Economic Market Different Economies.](https://reader036.fdocuments.in/reader036/viewer/2022082713/5697bfba1a28abf838ca094e/html5/thumbnails/5.jpg)
4 Factors of Production Land - all raw material and natural resources
(minerals, timber, land, etc) Labor - human resources (people) needed to create
goods/services using physical/mental efforts Capital - buildings, machinery, equipment used to
produce/distribute goods/services Entrepreneurship - efforts of individuals to develop
new and better products, means of production, or methods for marketing goods/services; the willingness to take the risk of organizing other resources for production.
![Page 6: Economics is a Way of Thinking Economic Question Factors of Production Economic Market Different Economies.](https://reader036.fdocuments.in/reader036/viewer/2022082713/5697bfba1a28abf838ca094e/html5/thumbnails/6.jpg)
Economic Market
Definition a market is the coming together of buyers and sellers for the exchange of goods and services.
Aka: economic interactions
• Exchange of money is NOT necessary for a market to exist
• Markets do NOT even have to exist in a physical place with technology today.
![Page 7: Economics is a Way of Thinking Economic Question Factors of Production Economic Market Different Economies.](https://reader036.fdocuments.in/reader036/viewer/2022082713/5697bfba1a28abf838ca094e/html5/thumbnails/7.jpg)
Economies
Command Market Traditional
Each answers the economic question differently.
![Page 8: Economics is a Way of Thinking Economic Question Factors of Production Economic Market Different Economies.](https://reader036.fdocuments.in/reader036/viewer/2022082713/5697bfba1a28abf838ca094e/html5/thumbnails/8.jpg)
COMMAND ECONOMY
Government answers economic question• What goods/services are produced• For whom they are produced• How they are produced
![Page 9: Economics is a Way of Thinking Economic Question Factors of Production Economic Market Different Economies.](https://reader036.fdocuments.in/reader036/viewer/2022082713/5697bfba1a28abf838ca094e/html5/thumbnails/9.jpg)
MARKET ECONOMY
Individuals and businesses answer the economic question.
• Individuals respond to pricing system• Price high - incentive for sellers to supply good• Price low - less incentive to produce
![Page 10: Economics is a Way of Thinking Economic Question Factors of Production Economic Market Different Economies.](https://reader036.fdocuments.in/reader036/viewer/2022082713/5697bfba1a28abf838ca094e/html5/thumbnails/10.jpg)
Market- aka: capitalist or free-market system
Allowed to own private property Allowed to keep the profit/income they earn
from using their private property Able to make most of the important decisions
in the economy Government may play a role, but
involvement is limited (schools, roads, parks)
![Page 11: Economics is a Way of Thinking Economic Question Factors of Production Economic Market Different Economies.](https://reader036.fdocuments.in/reader036/viewer/2022082713/5697bfba1a28abf838ca094e/html5/thumbnails/11.jpg)
TRADITIONAL ECONOMY
Economic question is answered based on• Ritual• Habit• Custom
All social behavior is based on customs of the elders and ancestors; individuals know their place in society
Found in remote areas Brazilian rain forest, Himalayan Mountains, Indonesian jungles