what is economics?. the study of how people and countries make decisions about how to use their...
TRANSCRIPT
What is Economics?What is Economics?
What is Economics?What is Economics?
The study of how people and countries make decisions about how to use their scarce resources in the most efficient way.
It is the study of choicesIt involves taking measurements, building
models and making predictionsWe can measure economics in different
ways: GDP, Unemployment, and CPI
Factors of ProductionFactors of Production
You need these basic resources to make goods and have resources
Natural Resources: resources found on earth (water, minerals, land, forests)
Labor: the work that people do to produce a good or service
Capital: machines, buildings, tools, and money
Entrepreneurship: Someone who starts a new business or improves an old one
Technology: Not just materials but the science and knowledge of technology
What is the difference between What is the difference between needs and wants?needs and wants?
Needs Wants
Something that we need to stay alive
FoodWaterClothingShelter
Item that is not needed to survive but makes life better
New CarTVMusic
What are goods and services?What are goods and services?
Goods Services
Items people buyCarsTV’sBedMP3 playersPhones
Work done for other people for a fee
TeachersDoctorsLawyersMechanicsStore Clerks
What is scarcity?What is scarcity?
A problem in which wants are greater than needs
Resources are limited, but wants are unlimited
Scarcity is the basic problem of all economics
Problem for individuals and businessesWe have to make choices because we
can’t have it all.
What are trade-offs?What are trade-offs?
Resources are scarce and we can’t have it all
A trade-off is when you give up one thing for another
Every time we make a choice we give up the opportunity to buy or do something else.
Ex: Extra $20, if you buy a baseball you then can’t go out to eat with friends.
Your choices come at a cost……
What is a opportunity cost?What is a opportunity cost?
When you give up something for something else you are doing at a cost…. An opportunity cost.
It is the cost of the best choice, or the choice not taken
Ex: Going to college may delay living on your own due to money
Ex: Graduating from high school you have a choice, work or school. Which one you give up is the opportunity cost.
Wrap-UpWrap-Up
Economics is about making choicesYou need resources to make and have
goods.People provide services in your daily life.There are unlimited wants and limited
resources.You can’t always get what you want!!!!