Download - Economic choices
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ECONOMIC CHOICES
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BASIC ECONOMIC PROBLEMS• Unlimited wants and needs vs. limited resources
• Budget cutbacks
• Operating costs do not always keep up with financial limitations
• Scarcity – not having enough resources to satisfy every need
• Some countries do not produce enough resources for their population
• Delivery not always available
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CHOICES• Economic Decision Making - Must make smart economic decisions
based on scarcity
• Must budget income based on needs and availability of items
• Decide what is needed and what is a luxury
• Trade-offs and Opportunity Costs –
• Trade-offs – When you give up something to have something else
• Opportunity Costs – Value of the next best alternative (helps control prices, affects decision making process)
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THE DECISION MAKING PROCESS• Define the Problem
• Problem must be clearly defined to make a smart decision
• Identify the Choices
• Identify the alternatives to the purchasing choice you will make
• Evaluate Advantages & Disadvantages
• How does purchasing an item affect your life, both positively and negatively
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THE DECISION MAKING PROCESS• Choose the Best Alternative
• Select the choice that is the best for you (financially, physically, mentally)
• Act On Your Choice
• Purchasing the item or service
• Review Your Decision
• Review the results of your decision. (buy again, have the service again?)