FOCUS QUESTIONS FOR THIS SECTION
How does money flow from consumers into a company?
How does that company use that money?
Section 3: Flow of Money
SECTION DESCRIPTION
In these lessons, students trace the movement of money from the customer to a business and learn how the company makes decisions with money received. Students begin with an understanding of income (the dollars that come in to a business) and expenses (the dollars that go out of a business). Students then analyze what possible influences exist that can affect both income and expenses.
LESSON OBJECTIVES
Define exchange as trading goods and services with people for other goods, services, or money.
Define income as the money a business receives from its customers who buy its goods and services.
Define expense as money spent by a business to cover the costs of producing a good or service.
LESSON OBJECTIVE
Distinguish income and expenses and how they relate to profit.
Explain exchange as trading goods and services with people for other goods and services or for money.
LESSON OBJECTIVES
Explain that voluntary exchange occurs only when all participating parties expect to gain.
Understand that income must be greater than expenses for a business to be profitable.
LESSON OBJECTIVES
Explain why competition among sellers results in lower costs and prices, higher product quality, and better customer service.
Understand the flow of money within a company and predict outcomes due to changing circumstances.
LESSON OBJECTIVES
Understand the flow of money within a company