ECONOMICSECONOMICS

How can you think like an Economist?

How can you think like an Economist?

Adam SmithAdam Smith

Considered the founder of modern-day Economics

Wrote a book called “The Wealth of Nations,” in which he argued that competition is the key to a healthy economy (1776)

Made a point that people want not only the basics necessities, but also things that make life easier, more convenient, and entertain them.

Considered the founder of modern-day Economics

Wrote a book called “The Wealth of Nations,” in which he argued that competition is the key to a healthy economy (1776)

Made a point that people want not only the basics necessities, but also things that make life easier, more convenient, and entertain them.

What is Economics All About?

What is Economics All About?

Economics- The study of how people use their limited resources to satisfy unlimited wants.

Economy: a system used to manage limited resources for the production, distribution, and consumption of goods and services

Economics- The study of how people use their limited resources to satisfy unlimited wants.

Economy: a system used to manage limited resources for the production, distribution, and consumption of goods and services

Economics is about…Economics is about… Studying how people use limited

resources to satisfy unlimited wants (Scarcity)

Analyzing everyday enigmas (puzzles or riddles that might be explained through economic analysis

Analyzing how economics work and describe how things are (positive economics)

Making policy recommendations and advise how things should be done (normative economics)

Teaching better decision making (the science of decision making)

Studying how people use limited resources to satisfy unlimited wants (Scarcity)

Analyzing everyday enigmas (puzzles or riddles that might be explained through economic analysis

Analyzing how economics work and describe how things are (positive economics)

Making policy recommendations and advise how things should be done (normative economics)

Teaching better decision making (the science of decision making)

WIO: Term EconomicsWIO: Term Economics

Write the term ECONOMICS vertically along the left side of a notebook page. Begin each line with a word that starts with the appropriate letter.

Each line must help answer the question, What is economics all about?

Include the following terms somewhere in your acrostic poem: engima, resource, scarce, science, normative economics, and positive economics.

Write the term ECONOMICS vertically along the left side of a notebook page. Begin each line with a word that starts with the appropriate letter.

Each line must help answer the question, What is economics all about?

Include the following terms somewhere in your acrostic poem: engima, resource, scarce, science, normative economics, and positive economics.

7 Principles that Guide an Economic way of Thinking7 Principles that Guide an Economic way of Thinking 1) Scarcity forces tradeoffs: Limited

resources force people to make choices and face tradeoffs (exchange of one benefit for another that is thought to be better) when they choose.

2) Cost vs. Benefits: People choose something when the benefits of doing so are greater than the costs. Cost-Benefit Analysis: compare the costs of an

action with the benefits of that action. If the benefit outweighs the cost, the action is worth taking

1) Scarcity forces tradeoffs: Limited resources force people to make choices and face tradeoffs (exchange of one benefit for another that is thought to be better) when they choose.

2) Cost vs. Benefits: People choose something when the benefits of doing so are greater than the costs. Cost-Benefit Analysis: compare the costs of an

action with the benefits of that action. If the benefit outweighs the cost, the action is worth taking

…CONTINUED…CONTINUED

3) Thinking at the margin: Most of the decisions made each day involve choices about a little more or a little less of something.

4) Incentives matter: People respond to incentives (any factor that encourages or motivates a person to do something) in generally predictable ways.

5) Trade makes people better off: By focusing on what we do well and then trading with others, we will end up with more and better choices than by trying to do everything for ourselves.

3) Thinking at the margin: Most of the decisions made each day involve choices about a little more or a little less of something.

4) Incentives matter: People respond to incentives (any factor that encourages or motivates a person to do something) in generally predictable ways.

5) Trade makes people better off: By focusing on what we do well and then trading with others, we will end up with more and better choices than by trying to do everything for ourselves.

Continued…..Continued…..

6) Markets coordinate trade: Markets usually do better than anyone or anything else at coordinating exchanges between buyers and sellers.

7) Future consequences count: Decisions made today have future (and often unintended) consequences.

6) Markets coordinate trade: Markets usually do better than anyone or anything else at coordinating exchanges between buyers and sellers.

7) Future consequences count: Decisions made today have future (and often unintended) consequences.

Seven Principles Poster Activity

Seven Principles Poster Activity

In your group, you will be assigned one of the seven principles of Economic thinking. With your principle, you need to create a poster that includes the following: Name of your principle Symbol that represents your principle One-Sentence Summary of your principle One example of the principle

Your poster needs to be neat, with legible print that is large enough to read from a distance.

In your group, you will be assigned one of the seven principles of Economic thinking. With your principle, you need to create a poster that includes the following: Name of your principle Symbol that represents your principle One-Sentence Summary of your principle One example of the principle

Your poster needs to be neat, with legible print that is large enough to read from a distance.