Introduction to Economics Day 1 What is Economics

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Introduction to Economics Day 1

Introduction to Economics Day 1

What is Economics – Quiz Choose the correct answer z Economics is the political

What is Economics – Quiz Choose the correct answer z Economics is the political science that deals with unemployment, inflation, taxes, business cycles, money, supply, and trade. z Economics is the social science that studies money and banking z Economics is the social science that examines the interaction of demand supply z Economics is the social science concerned with the problem of scarcity

And the answer is… n Economics is the social science concerned with the problem

And the answer is… n Economics is the social science concerned with the problem of scarcity n What is Scarcity? n Not enough resources to meet demand n Why do you think scarcity is a problem? n What else is Economics? n Economics is common sense made confusing. n Economics is the science of decision making.

Economics? z. The social science concerned with how individuals and societies decide how to

Economics? z. The social science concerned with how individuals and societies decide how to satisfy there unlimited wants given our limited resources. y. I can’t buy a car if I don’t have an income! z The science of decision making y. How to make decisions

“The Economic Problem” z. Scarcity… What is it? y. Limited resources but unlimited wants

“The Economic Problem” z. Scarcity… What is it? y. Limited resources but unlimited wants z. Unlimited wants VS Limited Resources y. You can’t buy 10 candy bars if the store only has 5 candy bars to sell. y. Can’t buy 3 burgers if you only have enough money for 1. y. What are some things that you “want” to have? Do you have the resources to purchase them?

Scarcity means… z. We must use things efficiently in order to maximize the number

Scarcity means… z. We must use things efficiently in order to maximize the number of goods and services we can produce. y. Don’t waste… z. The Economic Problem (Scarcity)– y. We can’t have everything we want!! y. Because of this… we need to make choices. x. What we want (need) VS what we can give up (live without)

How does scarcity impact you? z. Have you ever wanted something you couldn’t afford

How does scarcity impact you? z. Have you ever wanted something you couldn’t afford to buy? z. Did a store ever run out of the item that you wanted? z. Has anyone ever wanted you to do something that you didn’t have time to do?

Economics z. The study of how society allocates its scarce resources among its unlimited

Economics z. The study of how society allocates its scarce resources among its unlimited wants and needs.

Economics

Economics

Scarcity z. The basic economic problem that occurs because our desires exceed the resources

Scarcity z. The basic economic problem that occurs because our desires exceed the resources that exist in our society.

Opportunity Cost z. The value of any alternative that you must give up when

Opportunity Cost z. The value of any alternative that you must give up when you make a choice.

4 Resource Categories

4 Resource Categories

Land (Natural Resources) z“There is nothing wrong with any poor country that the discovery

Land (Natural Resources) z“There is nothing wrong with any poor country that the discovery of oil can’t cure. ”

Labor z. Energy, talent, and physical activity to produce work.

Labor z. Energy, talent, and physical activity to produce work.

Labor

Labor

Capital z. Resources that have been created to produce other goods and services.

Capital z. Resources that have been created to produce other goods and services.

Entrepreneurship z. The willingness and ability to innovate, to take risks, and to organize

Entrepreneurship z. The willingness and ability to innovate, to take risks, and to organize factors of production.

Closure z. Factors of production overhead.

Closure z. Factors of production overhead.