Economy and Resources Overview

Economy and Resources

• An economy is defined by careful management of resources.
• Resources are valuable items used to produce goods and services.
• A country's economic strength is tied to the production of goods and services.
• Resources are categorized into three groups: natural, human, and capital resources.

Natural Resources

• Natural resources are found in nature.
• Examples include coal, aluminum, gold, trees, air, water, soil, and wind.
• They provide raw materials for creating goods.
• Raw materials are basic substances used to make new products.

Human Resources

• Human resources are the people who work to produce goods and services.
• Skilled, professional, and competent employees are crucial for a successful company.
• A capable leader is vital to help employees perform their best and drive the company toward success.

Capital Resources

• Capital resources are money and items used to create goods and services.
• These items can include machines, tools, vehicles, and information.
• Examples include factories, machinery, and vehicles used in food production.
• Capital resources are essential for a country's economy and production.
• Access to these resources lets producers create new products and consumers obtain essential goods and services.

Scarcity and Trade

• A country's resources may be limited.
• Producers search for resources elsewhere if they run out locally, leading to international trade.
• International trade is the exchange of goods, services, and resources between countries.
• Countries may prefer trading over producing due to cost-effectiveness.

International Trade

• International trade involves exchanging goods, services, and resources.
• Countries may trade if one has a product or resource the other desires, or if it’s less costly to procure.
• Exporting is sending goods, services, and resources to another country.
• Importing is bringing in goods, services, and resources from another country.
• Trade between Saudi Arabia and China is presented as an example.

Deciding on a Price

• Producers set prices based on supply and demand.
• Supply refers to the amount of goods or services available.
• Demand refers to the consumer desire for a good or service.
• High demand and low supply create high prices.
• High supply and low demand create low prices.
• Market prices change based on supply and demand.

Starting a Business

• A business starts when an idea for a product or service is created and sold.
• Entrepreneurs are people who start and run businesses.
• Creating a business requires paying for resources to produce goods or services.
• The money earned over costs is the profit or gain.
• Start a business by identifying a product or service that meets a need or demand, and figuring out how to market and sell it.