Basic needs = Things people must have to live like food, shelter, and clothing

·       Wants = things people would like to have

·       Money = what is used to buy need and wants

·   Goods = things that people can make or can grow that can be purchased by others

·       Services = Activities or work done by a person for someone else

·      Buyer = a person who uses money to purchase goods or services; the person who pays

·       Seller = a person who sells goods or services; the person who gets paid

·       People make “choices” because they cannot have everything they want.

·       People can “spend” or “save” their money.

·       Savings = money put away to keep or spend later

·       Saving money allows people to buy goods and services in the future.

·       There are 3 types of resources that we use in making goods and providing services:

1.    Natural Resources                            (materials that come from nature),  such as:

a)   water

b)   soil

c)    wood

d)   coal

    2. Human Resources                        (the people who do the work), such as:

a)   farmers

b)   miners

c)    builders

d)   painters

3.    Capital Resources                                  (things made by people that are used to make other things), such as:

a)   hammers

b)   computers

c)    lawn mowers

d)   factory buildings

·       People can get goods and services with money or by “bartering”.

·       Bartering = exchanging goods and services without the use of money; trading one good/service for another good/service

·       Money can be paper bills, coins, or checks.

·       People are both producers and consumers.

(Producers are makers of goods or services; consumers are buyers or users of goods or services)

·       Scarcity = not being able to meet all the wants of people at the same time; not having enough

·       Economic specialization = focusing on 1 product or service as a means to make money or profit; being an expert in one job, product, or service

1.    The ancient Greeks and Romans both focused on farming, building ships, and making pottery as their economic specializations.

2.    The people of Mali specialized in growing food, and  protecting the empire.

·       Economic interdependence = 2 or more people or places depending on each other for goods and services; “I do for you and you do for me.”

1.    The ancient Greeks and Romans traded with each other and other nearby countries to get the things they needed.

2.    The people of Mali traded gold and salt.

·       Economic specialization and interdependence still happen today. 

1.    Virginia’s economic specialization is expert shipbuilding.

2.    In Virginia we sell our coal to other countries, but depend on others for oil.  This is interdependence.

·       Economic choice = what you choose between 2 or more things

·       Opportunity cost = what you give up when a decision is made

Check out these cool sites on economics:

*Information from the Grades K-3 History & Social Science Curriculum Frameworks (Commonwealth of Virginia Board of Education: Richmond, Virginia)