Louisiana’s Economy Resources and Rewards. Basic Economic Concepts Section 1 - Vocabulary.

Louisiana’s Economy

Resources and Rewards

Basic Economic Concepts

Section 1 - Vocabulary

Define goods

Goods are physical items

List examples of goods

•Car

•House

•Clothes

•Food

•Books

•Television

Define services

Services are activities people do for a fee.

List examples of people who perform services

•Teacher

•Postman

•Hair Stylist

•House Painter

•Musicians

•Mechanic

Define consumer

A consumer is a person who satisfies a want or need by buying a good or service.

Define producerA producer is a person or business who uses resources to make goods or provide services.

Look at the pictures below. Discuss the consumer and producer from each picture.

Define natural resourceNatural resources are gifts from nature

Define capital resourceCapital resources are the money and property

Define human resourceHuman resources are people who produce goods or services

Discuss the three types of resources found in the photograph below.

Define scarcity

Scarcity means that people want or need more than the available resources can supply.

Discuss what happens after a big hurricane. Everyone needs to fix the damages on their homes. People begin to purchase items from the lumber yard. How does scarcity effect this situation.

Define opportunity benefitOpportunity benefit is the item purchased or chosen or the value of the item purchased or chosen when a choice is made

Define opportunity costOpportunity cost is the item you did not choose or the value of the next best alternative given up when a choice is made

You go to the mall with $60. Make a choice on the items you will purchase. Now explain which item(s) are opportunity cost or opportunity benefit.

$15

$10

$35

$20

$40

Define supplySupply is the quantity of goods or services offered for sale

Define demandDemand is the quantity of goods or services people are willing and able to buy

Discuss what happens if the everyone in the town

of Abbeville goes to McDonald’s on the same day at the same time and

orders the exact same thing. What does this

have to do with supply and demand?

Define profit

Profit is the amount left after costs are subtracted.

Price Item Sold for – Cost to Make Item = Profit

Define traditional economyTraditional economy customs, beliefs, and habits determine how the four basic questions are answered.

What to produce

How to produce

How much to produce

For whom to produce

Define command economyCommand economy the government controls the economy and answers the four basic economic questions

What to produce

How to produce

How much to produce

For whom to produce

Define market economyMarket economy individuals answer the four basic economic questions based upon supply and demand.

What to produce

How to produce

How much to produce

For whom to produce