What Is Scarcity?: Not Enough Resources to Make the Things We Want

What is economics?: How we make decisions with limited resources
What is Scarcity?: Not enough resources to make the things we want
What are needs?: The resources we need for survival
What are wants?: The products for comfort
What are macroeconomics?: Larger levels; all paper, car, house, companies
What are microeconomics?: Smaller levels; chevy, true homes, (one company)
What's an economic model?: Theory; simple way of looking at life, idea of how it should work
What to produce: fill a scarcity; think of the product
How to produce: You have to have- skilled workers & people who go into it knowing what they’re doing.

Making Decisions:

Factors of Production:

entrepreneur: start and own a business
natural resources: land; as you would find in nature
labor: people in your company; the ones doing the work for a product to be produced
capital: all the leftovers; pencils, rubber, everything involved- not natural or human

Sectors:

consumer sector- a person who earns money at the factor market & spends at the product market
business sector- companies that get money from product markets and produce items in the factor market
government sector- collect money from other sectors; produce items in the factor market
foreign sector- exchanging goods
factor market- place where people work and earn money (factory)
product market- place where money is spent on products (mall)
promoting economic growth (increase productivity)- resources *s time = product

Economic systems:

command- government makes all economic decisions and people have no say (ex: north korea- leader decides prices, peoples jobs, how much and what to produce)
market economy- people make all decisions with no government interference (ex: L Luxenberg- supply and demand and control all decisions.
capitalism- do anything for a profit and let the people work it out
mixed- combination of command and market where people make decisions with government and help (ex: U.S.A.- can start any business you want but government will regulate it… “free enterprise”)
traditional- follow old traditions and rules- no new technology (ex: hippies & amish people “U.S.A.”)
import- we buy from another country
export- we sell to other countries
independence- all rely on each other

Trade/ Trade agreements:

goal: gain goods/ producers- imports selling our products to another/ foreign market- exports
trade- imports outnumber our exports
trade surplus- exports outnumber imports we gain money
balance of trade- we buy same number of imports as the amount of exports we sold- we broke even
1. you don’t lose money
2. maintain a good relationship
trade embargo- other countries help cut off trade (target country)
WTO- world trade organization
european- organizes all the independent nations
exchange rate- gives money a weight and tells people how much their money is worth
NAFTA- north american free trade aggreement
competition- keep crazy people and prices in check, best product for the best price.

Law of demand-

Change in demand-

Change in expectation-

substitute- competing/ replecant/ product/ have no effect on each other
complement- products that work together/ when demand for one goes up the demand for another goes up as well.
demand represents consumer
supply represents business/ seller

Types of businesses-

(Advantages: get all the credit and money, there is no boss or rules for you to follow; Disadvantages: unlimited liability; you owe all debts

partnership- businesses with two or more owners (hundreds of people) ; articles of partnership determine how many partners, how to buy in, how to sell out, who is responsible for what within the business
corporation- the sale of stock- ownership in the company; chartership determines how many shops of stock we will have and board of CEO, directors (disadvantages: unlimited liability, business decisions are shared)

Unions and negotiations-

collective bargaining union rep and the owner work out a new contract
mediation- a third party listens to both sides then suggest who should happen
arbitration- a third party listens to both sides and make them comply MUST DO
strike- workers refuse to work and stand outside and talk poorly about the company
boycott- workers refuse to and encourage customers to not buy the goods and services the company is supplying
labor unions- groups of workers who ban together in order to get better pay and better working conditions
knights of labor- fought for eight hour work days and higher wages

Types of labor unions-