understanding economic systems: satisfying needs & wants

UNDERSTANDING

Economic S y s t e m s

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Satisfying

Needs & Wants

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Part 1:

Something you must have to survive

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Something you desire to have

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Needs and Wants

are satisfied via

businesses offering

goods and services.

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Goods Tangible items sold to

customers/consumers.

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Services Intangible activities

businesses offer to

perform for their

customers/consumers.

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Resources

For creating

Goods & Services

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N at u r a l

R es o u rc es

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Raw materials found in the natural world.

Ca p i ta l

R es o u rc es

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The tools, equipment, and buildings that

are used to produce goods and services.

H U M A N

R es o u rc es

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The people who contribute physical and

mental energy to the production process.

T h e Bas i c E c o n o m i c P r o b l e m

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Exists because of limited resources for satisfying unlimited wants and needs

S ca rc i ty https://flic.kr/p/7Jcr9c

The limitation of resources to fulfill needs and wants.

Ec o n o m i c D e c i s i o n M a k i n g

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The process of choosing which wants, among several options, will be satisfied.

T r a d e O ff https://flic.kr/p/5StUPK

The process of giving up something for gaining something else.

O p p o r t u n i t y C o s t

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The value of the next-best alternative that you did not choose.