niga Berrien Breit ek’ ‘Why and how do people make economic choices? How do economic systems influence societies? Ors 1. What is scarcity and how does it affect economic choices? 2. What determines how societies make economic choices? | It Matters Because a i i Olen | Assonieone who uses goods and services and will some day bea worker, —_ egonils or services you are part of the American economic system, Novant tommake freshly squeezed orange juice. You go tothe stare to buy oranges, but the store has no oranges available. List reasons that could explain why there are Fat hiaving enough resources to TEI eee Seon is Sree an’ What Do You Know? Peer ae eee etn Eee no mem on ce eee Bale eats Sources and miake economic Ser ic! oa Tue Se . LC SUNN MM 1, How do people fil their wants ure and needs when there are not Due ‘enough resources? SUC Pore PERU Cease 2- What are economic cholces? onomicdecisions butinwhich MEAT Panaeneey peetCopyright @by The craw Compan Read Chapter 17 Lesson 1 in your textbook ar online. networks Our Wants and Resources When people shop, they sometimes want to buy more than they can afford. For example, suppose a girl named Jayna is shopping for a new dress. She finds a dress she likes, but she also sees a sweater she wants. She does not have enough money to buy both, What should she do? Jayna has a problem we all face at one time or another. She must decide how best to use her money to satisfy her wants. Wants are desires that people have that can be met by getting a product or a service. Most people want many things. In fact, our wants are almost without limit. ‘Wants can be either goods or services. Goods are things we can touch or hold. Dresses and sweaters are examples of goods. A service is work done for someone else. For example, the store clerk who rings up Jayna’s purchase is performing a service. Jayna must use her money to pay for her new dress. Money isa resource. Resources include everything that can be used to make or get goods and services. Economists talk about three kinds of resources, shown in the diagram below. Natural Resources Labor Capital + Land + Workers + Money + Things romtheland FF» Workers abilities + Buildings, tools thatcanbe used to + Moreworkers=more fF + Used tomakeor move ‘make goods and goods and services ‘goods or services services Resources are limited but wants are not. This means ‘we must make choices. Economics is the study of how people use limited resources to satisfy unlimited wants and needs. It is not only individuals who have many wants. City, state, and national governments have wants, too. Sometimes there are not enough resources to satisfy, or meet, wants and needs. This is known as seareity. In fact, no country has all of the resources it needs. Both individuals and governments are affected by scarcity. This makes scarcity the basic economic problem in the world. Economics looks at how people and governments deal with the problem of scarcity. 1 Interpret information What resources would the ower ofa pizza pattor ned? Write an example of ach kind ofthe three types of resources natural resources labor capital 2.Compare How are economics andscanty rebates? '3, Gree the basic economic problem ‘that people and nations fac. Take the Challenge 4 Wiha partner daw anlustration to show how the thre types of resources reused to produce a good arsenic Whats Economics? Lesson 255é oe ‘Whatmust asocety consider when deciding what goodsand services to produce? 6. Make inferences. In Country X ‘a government planner has decided that half the nation’s factories wl ‘make televisions, What type of ‘economic system does Country X have? 7.Interpret information What determines the kind of economy nation has? Societies and Economic Choices Individuals, or people, make economic choices all the time. So do countries. Nations must decide how to use their limited resources in the best way to care for and protect their citizens. For example, a government must decide whether it will spend ‘more money on health care or defense, education or the environment. The scarcity of resources forces societies to make these types of choices. These choices can be summed up by three basic questions: 1. What goods and services will be produced? 2. How will the goods and services be produced? 3. Who will consume, or use, goods and services? What goods and services will be produced? For example, should a piece of land be used for farming or to build an airport? If cannot be used for both. Should a government improve roads or build schools? To decide questions like these societies must think about their resources. A nation with good soil and a long growing season might use much of its land to grow crops. “How will goods and services be produced? For example, should food be produced on big factory farms or small family farms? Who will get the goods and services? Societies must decide who gets goods and how much people can have. They have different ways of distributing goods. Should new cars go,to public officials or to the highest bidder? Should new housing units be reserved for low-income people or should they be available to anyone? Societies answer these questions in different ways. Every country has its own economic system, or way of producing the things people want and need. ‘There are three basic types of economic systems, shown in the chart below. The Three Types of Economic Systems Indi wn resources. Economic decisions Traditional Economy | 216 rade based on custom and habit. Individuals and businesses own resources. Market Economy | They make economic decisions based on prices. The government owns resources. Government Command Economy | planners make economic decisions, 256 Chapter 17 Introduction to Economics “aa soedion mpvansrw aul Ka YESPHOTO: Chine Osborne Pictures th Stat Westmorend/EnycopedaiCORSS oprah by Te Men Compania ne The first type is the traditional economy. People ina traditional economy base their economic choices on custom or habit. A person whose parents and grandparents were farmers would also be a farmer. This type of economy is not very productive. It also does not change much aver time. New ways to produce goods are not usually tried. CMR en ee una cd or eeu eeu) Another type of economy is the market economy. In this system, people and businesses own the resources, They use them to produce goods and services, They answer the three economic questions based on price. 8. Compare and ontrast What s the ference betveen a traitonal economy and a matket economy? ‘9. With a partner or small group, researcha country that once had a traditional economy and now hasamarket economy. Make a poster with charts or graphs to shove how the change in economicsystem has affected the country’s economy. Atthis major toy storein ae ctg es eed cers What's Economic? Lesson 257espe az "10. compare and Contrast How ‘sacommand economy different ‘rom the other economic systems? ae alyze Doyouth a the United States has lays had amined market economy, of has it evolved overtime? Exain The third type of economic system is the command economy. In this system, the government makes the economic decisions. Planners and officials decide what goods to produce. They also decide how much to produce and who is allowed to buy them. Zimbabwe, acountry in Africa, hasa command economy, viich can Pe eee ‘The United States has a mixed market economy. In this system, businesses compete for profit, but the government also plays a tole. People and businesses choose what to produce ‘and how to produce it, Who receives the goods and services is decided on the basis of price. At the same time, the government makes rules for how workers should be treated. It oversees markets to make sure businesses are honest. It provides some services, such as schools and defense. ® NGSSS Check Howlsscardty related to economic choiesin the development ‘of the mixed market economy in the United States? ss.7e.13 258 Chapter 17 introduction to feonomies duseynoyity 010K bau saueoucy yt ersrn a Ma nu6koy