What does it all mean??????

The economy is the way people make or use their
                       resources, goods and services.

Learning about the economy of our state and country does not need to be confusing or difficult to understand.  To start, let’s explore the meaning of the words above. 

Natural Resources 

In earlier lessons we learned about the natural resources people use to meet their needs.  Natural resources are materials supplied by nature such as water, minerals, plants, and animals that are used to make a product or good.  Goods are objects such as food, items of clothing, and our possessions.  They are things that can be made.  We depend on each other to provide the goods we buy.  This is known as interdependence.

We also look to our community to provide services.  Services are actions that someone does for someone else.   These include such things as providing education, visiting the doctor,  protecting our city from fires, and removing trash.

Human Resources 

Natural resources are only one type of resource.  Our economy depends on other resources, too.  People are also resources.  Human resources are the people who supply services or produce goods.  People who provide goods or services are called producers.  Producers earn money performing their job, whether they are making a product or performing a service.  People must work to earn money to buy the things they need.  They may be employed in many different jobs and trades.  The people who use the services or buy the goods are called consumers.  All producers are also consumers, as they too are dependent on the products and services provided by our human resources.

Capital Resources

We also must have capital resources.  Capital resources are the things we use such as tools, buildings, and machinery to produce goods.  Capital resources must be purchased by the producer.  This cost is passed on to the consumer  so the producer can make a profit.

We must make many economic decisions as individuals and as citizens of our community, state and nation.  We make choices about what goods are produced and the resources that will be used to produce them.  We must control the use of our natural resources and protect them.  We must make sure our human resources are fairly treated. All of these decisions and many more, are important to our economy and will be explored in other lessons. 

Let's Review!

economy:   the way people make or use their resources, goods and services.

natural resources:  materials supplied by nature such as water, minerals, plants and
                                    animals
human resources:   the people who supply services or produce goods

capital resources:  the things we use such as tools, buildings, and machinery to produce goods and services

goods:   products that are made by producers and bought by consumers such as food
                and clothing

services:   work or actions that someone does for someone else

producers:   people who provide goods and services

consumers:   people who use resources, goods and services

interdependence:   the way we depend on each other to produce goods and
                                      services.