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the property of the Texas Education Agency and may not be reproduced without the express written permission of the
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Economy – The organized way a nation provides for the needs and wants
of its people.
Resources – All the things used in producing goods and services.
Productivity – Output per worker hour that is measured over a defined
period of time.
Factors of Production – Comprise four categories; Land, labor, capital,
and entrepreneurship.
Value – Refers to a perception by consumers that a product provides
satisfaction beyond the cost incurred to obtain that brand.
Traditional Economy – Traditions and rituals that answer the basic
questions of what, how, and for whom.
Market Economy – No government involvement in economic decisions.
Command Economy – A system in which a country’s government makes
economic decisions and decides what, when, and how much will be
produced and distributed.
Gross Domestic Product (GDP) – The output of goods and services
produced by labor and property located within a country.
Gross National Product (GNP) – The total dollar value of goods and
services produced by a nation.
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 Production
 Management
 Finance
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Land – Includes everything contained in the earth or
found in the seas.
 Labor – Refers to all the people who work.
 Capital – Includes money to start and operate a
business.
 Entrepreneurship – Refers to people who will invest
their time and money to run their own business.
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Nations must ask three basic questions when
deciding on how to use resources:
1. What goods and services should be
produced?
2. How should the goods and services be
produced?
3. For whom should the goods and services
be produced?
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In this economy, the three questions are
asked, and the answers are often based
on cultural or religious practices and
ideals.
 These traditions have been passed on
from generation to generation without
much change.
 There is little choice as to what is
produced.
 Tradition regulates who buys and sells
products.
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In this economy, there is no government involvement in
the decision making process as to what products are
produced.
The consumers decide what should be produced and
where.
Businesses decide how to produce good and services.
Whom –The people with the most money are able to
buy goods and services. This motivates people to work.
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In this economy, the government makes
economic decisions and decides what, when,
and how much will be produced.
The government controls the factors of
production and asks the three questions.
The government decides who.
The government decides how.
The government decides where.
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Advertising is related to the GDP in that it can
contribute to levels of overall consumer demand
when it plays a key role in introducing new products.
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Each economy conducts advertising in its own way.
What constitutes ethical advertising is highly
subjective.
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Advertising is to some extent persuasive in nature,
drawing an ethical guideline between what is good
rhetoric and what is misleading can be difficult.
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