Basic Economic Principles Chapter Notes | Social Studies for Grade 3 PDF Download

Introduction

Economics is all about how people use things to meet their needs and wants. It helps us understand how we make choices when we cannot have everything we want. This chapter will teach you about what economics is, why we make choices because things are limited, what natural resources are, the difference between goods and services, and who producers and consumers are. Let’s learn how these ideas work in our world!

What is Economics?

• Economics is the study of how people use resources to meet their needs and wants.
  • It looks at how people make choices about what to buy, make, or sell.
  • Economics helps us understand how money, goods, and services are used in our lives.
• It shows how people decide what is important when they cannot have everything.
  • For example, economics helps us understand why we choose to buy a toy instead of a book.

Scarcity and Choices

• Scarcity means there is not enough of something for everyone to have as much as they want.
  • Scarcity happens with things like water, food, or money because they are limited.
• Because of scarcity, people must make choices about what to use or buy.
  • Choices are decisions we make when we pick one thing over another.
  • For example, if you have $5, you can buy a snack or a small toy, but not both.
  • When we make a choice, we give up something else, like choosing to play instead of doing homework.
• Economics teaches us to think carefully about our choices because of scarcity.

Natural Resources

• Natural resources are things found in nature that people use to live.
  • Examples of natural resources are water, trees, air, and minerals like coal or oil.
  • Some natural resources, like water and air, are needed to survive.
  • Other resources, like wood or oil, are used to make things like houses or cars.
• Some natural resources can run out if we use them too much, like oil or forests.
  • We must use natural resources wisely so they last for a long time.
  • For example, planting new trees helps keep forests as a resource for the future.

Goods and Services

• Goods are things that people make or grow that you can touch, like toys, clothes, or food.
  • Goods are physical items you can hold, like a pencil or a sandwich.
• Services are jobs or work that people do for others, like teaching, fixing cars, or cutting hair.
  • Services cannot be held because they are actions, like a doctor helping you when you are sick.
• People need both goods and services to live and be happy.
  • For example, a farmer grows apples (a good), and a teacher helps you learn (a service).
  • Goods and services are traded or bought with money in our communities.

Producers and Consumers

• Producers are people or businesses that make goods or provide services.
  • For example, a baker is a producer because they make bread, and a doctor is a producer because they provide medical care.
• Consumers are people who buy or use goods and services to meet their needs or wants.
  • For example, when you buy a toy or visit a dentist, you are a consumer.
• Producers and consumers work together in economics.
  • Producers make things or do work, and consumers use those things or services.
  • For example, a farmer (producer) grows vegetables, and you (consumer) buy them to eat.