Economics

• SOL 3.7• SOL 3.8

• SOL 3.9

• SOL 3.10

• Exchange To trade one thing for another.

Example: I want to trade in my green disk for a blue one.

• BarterThe exchange of goods or service

without money.

Example: I’ll give you my cake for your ice cream.

Three Kinds of Money

Cash Checks Credit Cards

Needs vs. Wants

• Needs – what people must have to live.

Food

Clothing

Shelter

• Wants – the things we would like to have, but can live without.

Economic Choice

You make an economic choice when you only have money for certain items, not all.

Example:

I do not have enough money for both popcorn and a pretzel. I must choose, so I buy the popcorn. That is my economic choice.

YUM!

Opportunity Cost

Opportunity cost what you must give up when you make an economic choice.

Example:

I chose the popcorn, so I have to give up the pretzel. That is my opportunity cost.

Supply and Demand

• Supply is the amount of a good or service available.

• Demand is what people are willing and able to buy.

I would like to buy one candy cane, please.

Scarcity - Sometimes there is not enough of something to go around. That item is scarce.

Oh no! Ice cream is scarce!

“I scream, you scream, we all scream for ice cream! La, la, la, la, la!”

The Ice Cream Singers

What can I do with my money?

• Spend it

• Save it

• Invest it Give people money to use to make more moneys, like in stocks and bonds.

Goods and Services

• Goods • Services

Three types of resources work together in our economy

Human Resources

Capital Resources

Natural Resources

Natural Resources are things we get from nature.

Oil Coal Trees Water

Human resources are jobs done by humans at work.

Capital resources are the machines, tools and buildings needed to do a job.

Producers

Producers make goods or provide services.

Consumers

Consumers use or buy goods and services.

Economic Specialization

Individuals or groups who concentrate on one type of good or service.

Apple farmer Carpenter

Interdependence

People need each other for goods and services.

The Ancient Greeks traded their goods across the Mediterranean Sea.