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Chapter 1 A Look at Wants and Needs

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Learning ObjectivesLearning ObjectivesAfter completing this chapter, you’ll be After completing this chapter, you’ll be able to:able to:

1.1. State State the differences between wants and needs. 2.2. DescribeDescribe how limited resources relate to wants. 3.3. IdentifyIdentify business activities that are used for products

and services.4.4. ListList the two factors that motivate businesses. 5.5. ExplainExplain the relationship between business and you.

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Why It’s ImportantWhy It’s Important

Businesses satisfy people’s basic needs all the way to their lavish wants.

Competition and profit motivate these businesses to continually strive for your business.

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Key WordsKey Words

wantsneedsgoodsservicesresource

businessprofitcompetitionconsumer

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An Abundance of Wants An Abundance of Wants Wants are the things you wish you could have. Each person has wants.

A group of people may also share the same wants. Although these wants are shared, they are considered private wants.

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An Abundance of Wants An Abundance of Wants Some wants are widely shared by many people.

These wants are no longer considered private but become public wants, such as highways, drinking water, and education.

For the most part local, state, and federal governments satisfy public wants.

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Figure1.1 WANTS AND NEEDS OF YOUR SANCTUARY

You need yourown “space.”Studies show yourbedroom is anexpression of yourself.

Q1. How would you revamp your space if you could? Use this table to estimate your costs

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Satisfying Wants and Needs Satisfying Wants and Needs With Goods and Services With Goods and Services

•Necessary wants are needs.

•Food, shelter, and clothing are basic needs.

•Goods can be physically weighed or measured.

•Goods satisfy your wants and needs for material

things that you can see or touch.

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Satisfying Wants and Needs Satisfying Wants and Needs With Goods and Services With Goods and Services

Services are tasks that people or machines perform.

Services also satisfy some of your wants for things you can’t see or touch.

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Unlimited Wants,Unlimited Wants, Limited Resources Limited Resources

Most people have unlimited wants for goods and services.

The more money you make, the more goods or services you want.

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Unlimited Wants,Unlimited Wants, Limited Resources Limited Resources

A resource is anything that people can use to make or obtain what they need or want.

Examples of resources include fuel, timber, labor, and money.

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Unlimited Wants,Unlimited Wants, Limited Resources Limited Resources

The problem of unlimited wants and limited resources affects individuals, companies, and nations. Resources limit the number of wants people can satisfy. Businesses and government are influenced by the same problem.

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Deciding on Your Resources Deciding on Your Resources People make the most of their resources by making the right choices about what to buy.

The decision-making process is a step-by-step method to carefully consider alternatives that result in better choices.

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Deciding on Your Resources Deciding on Your Resources The decision-making process has five essential steps:1. Identify the problem.2. List the alternatives.3. Determine the pros and cons.4. Make the best decision.5. Evaluate your decision.

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Graphic Organizer

GOODSGOODS

TangibleMaterialThings

GOODSGOODS

TangibleMaterialThings

Economics’ Starting PointsEconomics’ Starting Points

Graphic OrganizerGraphic Organizer

SERVICESSERVICES

TasksPerformed

SERVICESSERVICES

TasksPerformed

RESOURCESRESOURCESAnything people canuse to make or obtain

what they want or need

NEEDSNEEDS

WANTSWANTSThings you wish you

could have

Necessary wants

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Fast Review

Q2. Define wants, needs, goods, services, and resources.

Q3. What is the difference between public wants and private wants?

Q4. List the steps in the decision-making process.

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What Is Business? What Is Business? Business is any activity that seeks profit by providing goods or services to others.

Businesses provide you with necessities.

Businesses also provide people with the opportunity to become wealthy.

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Business Activities Business Activities A business must organize the people and equipment to provide the product.

People within the organization manage the company’s resources to produce the product.

The company markets the product or service by deciding where to sell it and how to advertise it.

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Business’ Motivations Business’ Motivations Profit is the amount of money left over after a business has paid for the cost of producing its goods and services.

Profit is the motivation for taking the risk to start a business.

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Business’ Motivations Business’ Motivations A business is profitable when sales are high and costs are kept low.

Companies thrive on competition, or the contest between businesses to win customers.

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Figure1.2 RIDING THE SEA OF CHEESES

Cheese lovers’ tastes are changing to specialty cheeses. While cheddar and mozzarella are mainstays, sheep’s and goat’s milk cheeses are moving straight ahead to your nearest deli counter.Q5. Imagine you want to become a cheese maker. What kind of cheese would you make. Why?

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Business and You Business and You Businesses make many decisions that impact you.

However, you also affect business.

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You as a Consumer You as a Consumer A consumer is a person who selects, purchases, uses, or disposes of goods or services.

Business is aware of your changing needs and wants.

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You as a Consumer You as a Consumer Businesses affect you when they discontinue products. The decision to stop manufacturing products is often because there is a decreasing demand.

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You as a Consumer You as a Consumer When a company is slow to respond to customers’ complaints and doesn’t communicate very well, then customers usually find another company’s product to buy.

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You as a Wage Earner You as a Wage Earner In order to make products and provide services, businesses hire people to work.

In order to produce a product, the business decides how it will be produced.

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You as a Wage Earner You as a Wage Earner In business today, workers have more input about how business is done.

When you’re an employee, quality of work, decision-making skills, and input to problems help a business flourish.

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Fast Review

Q7. Explain the functions of business.Q8. List the business activities that

happen behind every product or service.

Q9. How does business affect you as a consumer and as a wage earner?

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Self-Discovery in Business Self-Discovery in Business Changes in the price of consumer goods, company bankruptcies and interest rates affect your life.

What happens in business and government will make a difference to the world you live and work in.

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The Value of Knowledge The Value of Knowledge When you become a business owner, manager, or employee, you’ll need business knowledge.

The more education you have, the better your income.

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What Do You Like? What Do You Like? Learn as much now in order to make an informed decision in the future.

Explore all the business opportunities in order to see what is available to you in order to satisfy your wants and needs.

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Fast Review

Q10. Why is it important to understand business today?

Q11. How will knowledge help your career?

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Q12. Does the media sway the public’s wants and needs?

Q13. How do environmental laws affect some businesses?

continued

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Q14. How are colleges going to meet the increased demand for continuing education courses?

continued

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Q15. Why is diversity an important stimulus to the workforce?

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