4 13 our economy

OUR

Fascinating Facts

ECONOMY

• A living person cannot have his or her picture
on a United States bill.

BY

• Some words that people sometimes use for
money are bread, bucks, greenbacks, jack,
and dough.

• The United States Mint makes about 20 million
pennies each day.

Genre

Comprehension Skill

Nonfiction

Cause and Effect

Text Features

• Chart
• Sidebars
• Captions

Scott Foresman Social Studies

ISBN 0-328-14846-6

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PATRICIA WEST


In this book you will read about the economy
of the United States and the part you play in
it. You will learn about some of the different
goods and services that can be bought and
sold.

Vocabulary

Write to It!

OUR

Write one paragraph telling about some of the
goods and services that you need and some
of the goods and services that you want.

ECONOMY

Write your paragraph on a separate sheet
of paper.

BY

economy

PATRICIA WEST

goods
services
consumer
producer
supply
demand
tax
globalization

Maps
MapQuest, Inc.
Photographs
Every effort has been made to secure permission and provide appropriate credit for photographic material. The publisher deeply
regrets any omission and pledges to correct errors called to its attention in subsequent editions.
Unless otherwise acknowledged, all photographs are the property of Scott Foresman, a division of Pearson Education.
Photo locators denoted as follows: Top (T), Center (C), Bottom (B), Left (L), Right (R) Background (Bkgd)

ISBN: 0-328-14846-6
Copyright © Pearson Education, Inc.
All Rights Reserved. Printed in the United States of America. This publication is protected
by Copyright, and permission should be obtained from the publisher prior to any prohibited
reproduction, storage in a retrieval system, or transmission in any form by any means,
electronic, mechanical, photocopying, recording, or likewise. For information regarding
permission(s), write to: Permissions Department, Scott Foresman, 1900 East Lake Avenue,

Glenview, Illinois 60025.
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Opener: ©Getty Images
2 ©Getty Images, ©Stephen Oliver/DK Images
3 ©David Young-Wolff/PhotoEdit
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7 ©James Leynse/CorbisEditorial Offices: Glenview, Illinois • Parsippany, New Jersey • New York, New York
8 ©AFP/Getty Images
9 ©Creatas
Sales Offices: Needham, Massachusetts • Duluth, Georgia • Glenview, Illinois
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Coppell, Texas • Sacramento, California • Mesa, Arizona
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14 ©Greg Pease/Getty Images


Goods and Services

Consumers and Producers

When you buy something, you are part of the
economy. The economy is a system of buying and
selling goods and services. Goods are things that
you can buy or sell. Milk, CDs, soccer balls, and
T-shirts are goods. Services are jobs someone does
for others, such as piano lessons.

All people are consumers. This means that people
buy goods and services that they need or want.

Some people are producers. Producers make or
provide goods and services. Bakers and farmers
provide goods. Teachers and dentists provide services.

The dog groomer
is a producer. She
provides a service.
The dog owner is
a consumer. He
buys a service.

The first coins are about 2,600 years old!
About 1,400 years ago, the Chinese began using
paper money.

These are all examples of goods that
are bought and sold.

2

3


In the past, people made all the goods they needed.
Now we rely on others to produce most goods and
provide services.

Needs and Wants
The goods and services that we must have to live
are called needs. Needs include food and a place to

live. Wants are goods and services that we would like
to have but do not need. For example, bread and milk
are needs. Ice cream and CDs are wants.

Choices
Consumers must make choices. They cannot buy
everything they want. If you receive money as a gift,
you may want to use it to buy a book. You may also
want a CD. If you do not have enough money to buy
both, you will have to make a choice.

Shoppers are faced
with many choices.

4

5


Supply and Demand
The amount of goods and services in the economy is
called the supply. The demand is the want or need
that makes consumers buy these goods and services.
Sometimes the supply of an item is larger than the
demand for it. Then there will be items left over. Other
times the supply of an item is less than the demand for
it. Then some consumers may not get what they want
or need.

When the demand for a

product is smaller than
the supply, the seller
may lower the price.

6


Cost and Price
Producers of a good or a service want to make
money. A maker of soccer balls has to buy materials,
hire workers, and provide a place to make the balls.
The money for these things equals the producer’s costs.
The cost to make one ball may be seven dollars. If the
producer sells a ball for ten dollars, he or she makes
three dollars in profit.
Soccer balls like this one can be made quickly and cheaply.

This worker is saving her money at a bank.

Work and Pay
The owner of a factory or store is an employer.
The employer pays the people who work there. The
workers are called employees.
The money that a worker earns can be spent on
goods or services, or the worker can save it.

8

9

Our Nation’s Economy
Our state and national governments help provide
people with some goods and services. A government
does this by collecting many kinds of taxes.
One tax is an extra charge on some goods you buy.
For example, if a CD costs ten dollars, the seller may
charge you ten dollars and fifty cents. The extra fifty
cents charged is sales tax.

The state and the federal government use money
from taxes to pay for services like national parks,
playgrounds, schools, police, and firefighters. These
are services that everyone needs.

Tax money helps to pay
for national parks, such
as Yellowstone National
Park in Wyoming.

10

11


Goods from Around
the World
Your home probably contains goods that come from
faraway places and some goods from places close to
home. You can often find where an item was made by

looking at its label.
This is a list of items that might be found in a kitchen
and where they may have been made.

KIND OF GOOD

PLACE MADE

Clock

Hong Kong

Toaster Oven

Japan

Mug

England

Blender

Mexico

Dish

China

Fork

Germany

Teapot

France

Place Mat

India

12

Some goods can be made more cheaply in other
countries than they can be in the United States.
Sometimes a company in the United States moves
its factories to another country. When this happens,
workers in this country may lose their jobs to workers
in the other country.

13


Many imports
and exports are
sent by sea.

Citizens of the World

Imports and Exports
The United States trades goods with many countries.

The goods that a country buys from other countries are
called imports. The goods that a country sells to other
countries are called exports. Today the Unites States
imports more goods than it exports.

14

Globalization is a world economy in which goods
and services move easily among many countries.
People in other countries can enjoy movies, songs,
and clothes made in the United States. People in
the United States can enjoy such things as fruit from
Mexico, cars from Japan, and shoes from Italy.

15


In this book you will read about the economy
Glossary
of the United States and the part you play in

Write to It!

consumer a person who buys goods and services
it. You will learn about some of the different
demand
the services
amount that
of ancan
item

consumers
goods and
bethat
bought
and
are
willing to buy at different prices
sold.
economy the way in which the resources of
a country, state, region, or community are
Vocabulary
managed
economy
globalization the process by which a business
goods
makes something or provides a service in
services
different places around
the world

Write one paragraph telling about some of the
goods and services that you need and some
of the goods and services that you want.
Write your paragraph on a separate sheet
of paper.

consumer
goods items that can
be bought and sold
producer

producer a person who
makes goods or products
to sell
supply
services jobs that someone
does for others
demand
supply the amount of an
taxitem someone has to sell
tax money the government
collects to pay for its
globalization
services

Maps
MapQuest, Inc.
Photographs
Every effort has been made to secure permission and provide appropriate credit for photographic material. The publisher deeply
regrets any omission and pledges to correct errors called to its attention in subsequent editions.
Unless otherwise acknowledged, all photographs are the property of Scott Foresman, a division of Pearson Education.
Photo locators denoted as follows: Top (T), Center (C), Bottom (B), Left (L), Right (R) Background (Bkgd)

ISBN: 0-328-14846-6
Copyright © Pearson Education, Inc.
All Rights Reserved. Printed in the United States of America. This publication is protected
by Copyright, and permission should be obtained from the publisher prior to any prohibited
reproduction, storage in a retrieval system, or transmission in any form by any means,
electronic, mechanical, photocopying, recording, or likewise. For information regarding
permission(s), write to: Permissions Department, Scott Foresman, 1900 East Lake Avenue,
Glenview, Illinois 60025.

1 2 3 4 5 6 7 8 9 10 V0G1 14 13 12 11 10 09 08 07 06 05

16

Opener: ©Getty Images
2 ©Getty Images, ©Stephen Oliver/DK Images
3 ©David Young-Wolff/PhotoEdit
4 ©Getty Images
7 ©James Leynse/Corbis
8 ©AFP/Getty Images
9 ©Creatas
11 ©Ted Wood/Getty Images
13 ©Brand X Pictures
14 ©Greg Pease/Getty Images