What is Economics Chapter 1 section 1 Wants

What is Economics? Chapter 1; section 1

Wants, Needs, and Choice Economics The study of how people make decisions, and satisfy unlimited wants/needs, with limited resources Economics is divided into two parts Microeconomics Study of econ dealing with individual people and businesses, and how they make decisions Think micro = small Macroeconomics Study of the econ as a whole. The global economy Think macro = large

The Problem of Scarcity What is scarcity? The idea that there are not enough resources available to satisfy everyone’s wants/needs Everything is limited, therefore scarcity pertains to virtually all things Remember: Scarcity is NOT the same as Shortage Scarcity is the basic problem in economics

Difference Between Goods and Services Goods Tangible product. Something that can be seen, touched, tasted, etc. Service Activities that can be done for someone Haircut, doctors, lawyer all provide services

The Factors of Production The resources needed to produce goods and services Land “gifts of nature” The actual land a business sits on Trees, water, animals Labor The workforce of a business

F. O. P. cont… Capital Machinery, or tools used to make the products Entrepreneurs The people who actually start a business Technology Added by some economists Helps with using other factors of production more efficiently