Economics You What is Economics Economics is all

Economics & You

What is Economics? Economics is all that deals with the production, distribution, and consumption of goods and services. You are involved in economics every day of your life.

How does economics relate to MY life?

Resources are the factors of production that are used in the production of goods & services. Types of resources are natural, human, capital and entrepreneurship.

We all use resources every day.

Scarcity is the inability to satisfy all wants at the same time. All resources and goods are limited. This requires that choices be made.

Sometimes there are many choices.

Sometimes only a few choices. “Lookin’ good, playa!” ← Check out the shoes.

Choice is selecting an _item_ or _action_ from a set of possible alternatives. We must make choices because goods & services are _limited_.

Since resources are limited… You have to make smart choices.

Opportunity Cost is what is _given_ _up_ when a choice is made - the next _highest valued alternative. Individuals must consider the _value_ of what is given up when making a _choice__.

Incentives are things that incite or motivate someone to make a choice. Incentives are used to change economic_ _behavior_.

Price is the amount of _money exchanged for a good or service. Interaction of _supply_ and __demand__ determines price.

Price determines who gets _goods_ and _services__. KNOCHE $$ Too Much $$ (for you)

Demand is the amount of a good or service that _consumers_ are willing and able to _buy_ at a certain price. Generally if… Demand is high → Price is Demand is low → Price is _high_ _low__

Demand is high Demand is low

Supply is the amount of a good or service that _producers_ are willing and able to _sell_ at a certain price. Generally if… Supply is high → Price is _low_ Supply is low → Price is _high_

Production is the combining of human, natural, capital, and entrepreneurship _resources_ to make goods or provide services. Resources available and _consumer_ _preferences_ determine what is produced.

What resources go into the production of a computer?

Consumption is the using of goods and services. Consumer _preferences_ and _price_ determine what is __purchased_.

Where can you find consumption in this picture?

Economics Make it a great unit or not, the choice is yours.