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Economics BasicsEconomics BasicsMs. Green

Well it is the study of everything about decisions being made

From how things are made, bought, sold and used to decisions on how to spend our time and resources

What is Economics?What is Economics?

Studying Gross Domestic Product (GDP) and unemployment rates to understand how country or large corporation is doing.

GDP is the value of every good or service produced in a country.

What are some goods and services?

MacroeconomicsMacroeconomics

Develop models that explain the relationship between factors as national income, consumption, unemployment, inflation, savings, international trade.

MacroeconomicsMacroeconomics

GDP = C + I + G + (Ex - Im)

“C” =spending by consumers,“I” = investment by businesses,“G” = government spending“Ex” = total exports (country sells)

“Im” = total imports (country buys)

Divide GDP by number of people equals standard of living

Calculating GDPCalculating GDP

This measures what the “average” person in the country should have.

US has one of the highest standards in the world.

Standard of LivingStandard of Living

studies the behavior of how the individual modern household and firms make decisions in using resources.

Studying how you spend your money, the decisions you make, and how you use your time is microeconomics.

MicroeconomicsMicroeconomics

Big and Small

Macro and MicroMacro and Micro

What we need to have vs. what we want to have

Need: Food, water, house Want: Ipod, Cable TV, Air Jordans

Sometimes needs and wants overlap.  ◦ E.G. cake is a food, but it is not a need, but a

want.  In general, you need a basic diet to survive, but that diet does not need to include cake.

Wants and NeedsWants and Needs

Wants and Needs ActivityWants and Needs Activity