Economics Social science concerned with how individuals institutions

Economics • Social science concerned with how individuals, institutions, and society make optimal decisions under conditions of scarcity

Economics Intro: Basic Economic Concepts "The Stall" Seinfeld

Which of the following resources are scarce? • • • • Water Education Food Oxygen Paper Apples Computers Lumber Manure Rocks Trees Information Concert Love Medication Oil • Choose yes or no for each of the following goods. • Compare your decisions with a partner

Agriseek

The Fundamental Economic Problem • Scarcity: is the condition that results from society not having enough resources to produce all the things people would like to have. Thus a cost must be born in order to obtain a resource when this condition exists. • population video

Find a partner • Imagine that you are producing a good or service…your choice. • Brainstorm a list about what decisions you have to make

Fundamental Economic Questions 1. What do I produce? 2. How do I produce it? 3. For whom do I produce it for?

Factors of Production • • Land Labor Capital Entrepreneurs

How do we use these resources? • Economic choices--with the goal of increased productivity to minimize scarcity. – Trade offs – Opportunity cost – Benefit-Cost analysis

Tradeoffs • All of the other options available when making economic choices.

Opportunity Cost • What was Kevin Durant’s opportunity cost of entering the draft after one year of college? • What would have been his opportunity cost had he stayed in college?

I need 6 volunteers… • Each volunteer will market a good to the class for 30 seconds. • Each “consumer” will rate each good according to their own utility for that good.

“There is no such thing as a free lunch” WHY?

Marginal Cost-Benefit Analysis • Systematic process for measuring the costs and benefits of a specific action

Economic Growth and Productivity

Production Possibilities Frontier

Review • • • Economics Scarcity Fundamental economic questions Factors of production Tradeoffs Opportunity Cost There’s no such thing as a free lunch Benefit-Cost analysis Production possibilities frontier