UNDERSTANDING ECONOMIC SYSTEMS
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Transcript of UNDERSTANDING ECONOMIC SYSTEMS
UNDERSTANDING ECONOMIC SYSTEMS
CH 1.3
SUPPLY AND DEMAND Lets read pages 19-21 together!
Demand:▪ Quantities of a good or service that consumers are
willing to buy at various prices and time periods Supply:
▪ Quantities of a good or service that producers are willing to sell at various prices and time periods
Equilibrium price: The price at which the quantity supplied exactly
equals the quantity demanded of that product.
Supply and demand graph
CAREER SIMULATION
ECONOMIC TERMS
PRODUCTION: ▪ the creation of goods and services
RESOURCES:▪ The raw materials, labor, knowledge, and equipment
used in production. SCARCITY:
▪ Consumers wants are greater than the resources available
TYPES OF RESOURCES
Human▪ Efforts of humans that add value to products
Natural▪ Limited resources available on the planet
Capital▪ Financial or monetary resources invested to
produce products
TYPES OF ECONOMIES Traditional:
▪ Production is passed through generations▪ Tribes in remote areas
Command:▪ Government owned▪ Companies are told what to sell
Market (Capitalist)▪ People own the businesses▪ Purpose is to generate a profit▪ Here in the U.S.
Mixed▪ Combination of a Command & Market (China)
5 TYPES OF ADVERTISING
CH 1.5
BRAND ADVERTISING
More likely for consumers to remember and know the brand
▪ Examples? Catchy jingles? Funny commercials?▪ Famous Athletes, celebrities?
Cost of brand advertising is a higher price for the product or service▪ Coca-cola spends more money on advertising
than any other product in the world Why does brand advertising raise the price?
celebrities!
Product placement
Putting brand name items in a movie for everyone to see!
Product placement….
How many items do you see?
INFORMATIVE ADVERTISING Consumers will buy the product
based on what the product can do▪ (This is the correct way of consuming!!)
May include testimonial from satisfied costumers▪ Infomercials!
http://www.youtube.com/watch?v=23zGquwJfbw&feature=related
COMPARATIVE ADVERTISING A comparison of one product to
another (competitor) Try to exploit the competitor’s
weakness
comparative advertising
DEFENSIVE ADVERTISING May be in response to a claim made
by a competitor The opposite of Comparative
advertising The wars between Pepsi and Coke in
the 80’s
PERSUASIVE ADVERTISING Ads try to appeal to emotions of the
consumer Their product will make you happy,
successful, popular, etc…
Persuasive advertising