What Are The Three Types Of Economic Resources – 2 Needs Essential needs are things needed for survival. Food, water, clean air, clothing and shelter. Better education, better employment and security. Most people need transportation, medicine, and medical care.
Desires are things that add comfort and joy to your life. Determining which products and services meet needs and wants is not always easy.
What Are The Three Types Of Economic Resources
Your needs and desires will never end! You are limited only by your imagination and the inventory available for sale. Desires may change day by day!
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These are products that you can buy to meet your needs and preferences. Services are activities provided for the satisfaction of others that are consumed at the same time they are produced. Businesses offer services to you when you want to consume them.
Goods/services are purchased by businesses and individual consumers. Some products/services are made for a business or consumer. Doing business requires steel, plastic, gas and computers. Consumers buy televisions, furniture, telephones and books. They eat at restaurants, go on vacations, and take their car in for repairs. Businesses provide goods and services that meet the needs and wants of businesses and consumers.
9 U.S.C. The economy of the U.S. The world’s largest producer of goods and services! It produces more than the next two largest producers, China and Japan. to us. It is the world’s largest consumer. Example: US oil consumption is number one. In 2009, the US It consumed about 20 million barrels per day, more than the combined consumption of the next four countries: China, Japan, Russia and India.
10 As the U.S.-Consumer Goods shift from an agricultural-based economy to an industrialized economy, consumers will have higher incomes and a greater choice of products and services. More money to spend, increased consumer spending. An increase in consumer spending in the country means more employment opportunities and a higher standard of living. However, as usage increases, new problems arise for consumers.
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11 Consumer Challenges With so many products and services readily available, consumers are tempted to buy things they don’t need. Through careful purchasing decisions, people can meet their basic needs, fulfill some of their desires, and still save and invest for their future.
Increased consumption creates challenges for countries. For example: pollution control, conservation of natural resources and waste management are all growing concerns around the world. In addition to being the world’s largest producer of goods and services, the United States excels in another area. Above: Americans produce more trash per person per year than residents of any other country.
13 Economic Resources How are the goods and services you need produced? Individuals no longer produce the goods and services they consume. Businesses use economic resources to produce goods and services. Economic resources are materials that can be used to produce goods and services. Also called factors of production!
Three types of economic resources: natural resources, human resources and capital resources. Businesses and individuals can obtain the financial resources they need to produce goods and services.
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15 Natural Resources Natural resources are raw materials provided by nature. Earth contains the oil, minerals and nutrients needed to grow crops and forests and feed animals. Rivers, lakes and oceans are sources of food and water. All the things you consume start with one or more natural resources. The supply of these resources is limited and increased consumption can harm our environment. Recycling and conservation help conserve resources.
16 Human Resources The people who produce goods and services are called human resources. Many people are needed to complete the work required to produce a product. Farmers raise livestock and crops, factory workers and managers use equipment designed by engineers, and food is processed by employees of other businesses. Truck drivers, salespeople, advertisers and store staff are important!
An entrepreneur is a risk taker who uses resources to develop a new product or service. Without the creative ideas of entrepreneurs and their belief that they can create a successful business, there would be fewer options for goods and services and fewer jobs.
18 Capital Resources People need access to tools and equipment to transform natural resources into products. Materials and money used in the production of goods and services are sources of capital. Capital resources include: buildings, equipment, materials, cash. Some people invest money in the business so that the business has the necessary capital to operate. These people expect to make money on profits.
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19 Resources are finite All economic resources have a finite supply. More resources can be used to produce different products and services. Individuals, businesses, and even nations compete to access and own economic resources. Those resources that are in high demand or have limited supply command high prices. Because there are limited amounts of natural resources, there is a limit to the goods and services that can be produced.
Individuals and businesses have unlimited wants and needs. However, the financial resources available to meet their needs are limited. Adjustment of unmet needs and wants and limited financial resources is called: basic economic problem.
Scarcity means not having enough resources to meet every need. Deficiency affects everyone, but some are more affected than others. People with low incomes must carefully choose the best way to spend their money. Countries with few natural resources or poor educational systems may not be able to produce enough goods.
24 Financial Choices Everyone has to make financial decisions based on scarcity. Families, companies, governments. Scarcity forces you to make choices or decisions between alternatives. Economic decision-making—the process of choosing to satisfy needs and wants.
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25 Trade-offs Most of the choices you make are the result of considering many alternatives. When you decide on an alternative, you let go of the other alternatives you have chosen. When you give up something to get something else, you make a transaction.
26 Opportunity costs are the value of the next best alternative that you do not choose. You are willing to give up to be your first choice.
Evaluate the advantages and disadvantages of each option to define the problem and identify options. Choose the best alternative action of your choice. Check your result.
Every country in the world has to deal with a fundamental economic problem. To determine how available resources are used to meet wants and needs, each country must answer three economic questions: What goods and services are produced? How goods and services are produced. What needs and wants are satisfied by the goods and services produced.
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30 What to produce? Countries have different types and resources. Some countries have fertile soil and normal rainfall. Other countries have desert climates or long, cold winters that make farming difficult. Some countries have abundant oil, coal and other energy resources. Each country decides what to produce to meet its needs and wants.
31 What to produce? Countries must determine the best ways to use their resources to produce what they need. Each country decides how to use its resources to produce the goods and services it needs.
Because wants and needs are unlimited, no matter what a country decides to produce, many will not be satisfied.
Capitalism refers to the private ownership of economic resources by individuals rather than by government. Individual owners can decide what to produce with the resources they have. Individual consumers can decide how to spend their money to purchase goods and services.
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37 Private Property The right to private property is anything of value that you can own, use, or dispose of. to us. You can keep what you want and decide what you want to do with it, it’s logged legally.
38 Freedom of choice means that you are free to make financial decisions and accept the consequences of those decisions. Business owners can decide where to open the business, what to sell and how to manage the company. Consumers can decide where to shop, what to buy and what to spend. Restrictions on freedom of choice exist only when individual decisions unreasonably harm others.
39 For-profit businesses invest resources and take risks with the primary objective of making a profit. Profit – The money left over from sales after all costs of running the business have been paid. Because businesses do not guarantee profits, investors risk losing the money they put into the business.
Businesses are challenged to plan carefully, invest wisely, and produce products and services that customers want to make a profit. At the heart of the free enterprise system is profit-making, not the only reason for investing money and running a business. People enjoy the challenge, freedom and satisfaction of business ownership