Economics and ATVsEconomics and ATVs

What is Economics?What is Economics?

The study of choices that people The study of choices that people make to satisfy their needs and make to satisfy their needs and wants.wants.

There are two large groups of There are two large groups of economic “decision makers” Who economic “decision makers” Who makes decisions?makes decisions? Consumers – people who Consumers – people who

decide to buy thingsdecide to buy things Producers – people that make Producers – people that make

the things that satisfy the things that satisfy consumers’ needs and wantsconsumers’ needs and wants

How do you make decisions?How do you make decisions?

Based on your needs and wantsBased on your needs and wants Needs – necessary for survival: Needs – necessary for survival:

food, shelter, etc.food, shelter, etc. Wants – goods & services that Wants – goods & services that

people consume beyond what is people consume beyond what is necessary for survival: ipod, etc.necessary for survival: ipod, etc.

ATV and Needs/WantsATV and Needs/Wants

Farm OperatorFarm Operator Need or Want?Need or Want?

TeenagerTeenager Need or Want?Need or Want?

Is an ATV a Good or a Is an ATV a Good or a Service?Service?

Goods – physical objects that Goods – physical objects that can be purchasedcan be purchased

Services – actions or activities Services – actions or activities performed for a feeperformed for a fee

Think About It?Think About It?

How can an ATV be both a good How can an ATV be both a good and a service?and a service?

Choices in EconomicsChoices in Economics

We choose among various We choose among various alternatives depending on future alternatives depending on future rewards or consequencesrewards or consequences

We will hopefully pick the best We will hopefully pick the best choice possiblechoice possible

Think About It…Think About It…

What are the future rewards and What are the future rewards and consequences you must look at consequences you must look at when deciding to wear/not wear when deciding to wear/not wear a helmet when riding an ATV?a helmet when riding an ATV?

CostsCosts

What are the costs of Brad not What are the costs of Brad not wearing his helmet?wearing his helmet?

How did his choice have an How did his choice have an economic impact?economic impact?

Opportunity CostOpportunity Cost

The cost of a good measured in The cost of a good measured in terms of lost opportunity to terms of lost opportunity to pursue the best alternative pursue the best alternative activity with the same time and activity with the same time and resourcesresources

Think About It…Think About It…

Wear the helmet?Wear the helmet? Do not wear the helmet?Do not wear the helmet? What are the opportunity costs What are the opportunity costs

of each choice?of each choice?

Human CapitalHuman Capital

The set of skills in which a person acquires on the job, through training and experience, and which increases that person’s value in the marketplace and community

Think About It….Think About It….

How did Brad’s ATV injury How did Brad’s ATV injury impact his human capital?impact his human capital?

His productivity?His productivity?

How are these related?How are these related?

What does this represent?What does this represent?