Objective 1.02

Role of an Individual

Consumer, Producer and Citizen

Roles as Consumer

• Individuals buy more than two-thirds of all goods and services produced.

• Buying something is casting a dollar vote

• Dollar votes = Demand

Demand

• Quantity of a product or service that consumers are willing and able to buy at a particular price.

• Knowing demand = type and quantity of products and services

Supply

• Quantity of a product or service that businesses are willing and able to provide at a particular price.

• Product or service will continue to be sold at a price that can cover cost of operation

Supply and Demand

• Prices are determined after studies

• Demand affects price.– More want = higher price– Less want = lower price

• Supply affects price– Cover operating costs and make profit– Supplier must produce good product and

operate in an efficient means

Competition

• Keeps prices reasonable

• Businesses set prices to pay for operating costs and to make profit.

• Competition keeps one company from charging higher prices

Role as Producer

• Improving productivity can reduce consumption of resources, increase business profits, and enable the business to pay its employees a higher wage and/or reduce prices on its goods and services, which may enhance the business’s competitive edge.

Standard of Living

• A measure of how well people in a country live; the quality and quantity of wants and needs that are satisfied; it is the way you live as measured by what you can afford; determined by your choice of career.

Continued

• To improve standard of living is to produce more

• Labor productivity– Quantity of a good that an average worker

can produce in an hour

• Higher productivity has enabled U.S. to achieve a standard of living among highest in the world

Continued

Ask yourself:

• How might your career choice affect your future standard of living?

• What kinds of cars represent different standards of living among people?

• The car I desire will represent what kind of standard of living?

Role as a Citizen

• Your Role As A Citizen In A Free Enterprise System

– Voting

– Paying Taxes

– Obeying the Law

Continued

• Public goods are needed by community and provided by government

• They provide a better quality of life

• Collective decision making– Making decisions w/ other citizens on how to

use scare resources provided for everyone’s use