Economics 1. What is economics? It is the study of how people make decisions in a world where...

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Economic s 1. What is economics?

Transcript of Economics 1. What is economics? It is the study of how people make decisions in a world where...

Page 1: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

Economics

1. What is economics?

Page 2: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

It is the study of how people make decisions in a world where resources are limited: the science of decision making.

Page 3: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

2. People have needs that are required for survival such as:

Page 4: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

•Food •Clothing

•Shelter

Page 5: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

3. People also have many wants: things that make life for comfortable.

Such as:

Page 6: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

•Entertainment

•Vacations

Page 7: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

4. The basic economic problem is:

SCARCITY

Page 8: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

When there are not enough resources to produce all the things people would like to have.

Page 9: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

Because of scarcity, society must make three economic decisions:

1) What to produce?

Page 10: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

2) How should goods and services be produced?

Page 11: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

3) For Whom should they be produced?

Page 12: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

Goods: tangible items such as -

•shoes

• cars

•roads

Page 13: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

Services: what people DO for someone in exchange for something of value. Such as:

Page 14: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

•mechanic

•maid

Page 15: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

Resources:

1. Natural Resources: come from the earth:

water

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soil trees

minerals

Page 17: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

2. Human resources:Skills Knowledge

Page 18: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

energy Physical capabilities

Page 19: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

What should be produced?

During wartime metal may be used for weapons instead of pots and pans.

Page 20: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

Farmers may be used as soldiers resulting in less food production.

Page 21: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

2. How should they be produced?

Which natural resources should be used to build a road?

Page 22: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

dirt cement

gravel

Page 23: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

Should we allow more pollution in exchange for greater output and cheaper prices?

Page 24: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

3. For whom to produce?

This deals with the distribution of goods and services.

Page 25: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

In the U.S. people who make the most money are able to buy the most goods and services.

Page 26: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

Choices involve trade-offs:

Exchange one thing for the use of another.Pots & pans/ tanksFarmers/ soldiers

Clean air/ cheap prices

Page 27: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

Opportunity cost – The next best alternative you had to give up for a choice you made.

skiing

homeworkconcert

Page 28: Economics 1. What is economics? It is the study of how people make decisions in a world where resources are limited: the science of decision making.

To make economic decisions, people have to take into account all the costs and benefits of an action.