What is Economics?

• Do you ever wonder why food costs rise when gas prices spike? • Have you ever questioned why U.S. politicians worry when other countries talk of • going bankrupt?

• Do you know why you can’t get a good interest rate on your savings account?

• All of these circumstances can be explained through economics

What isEconomics?

Scarcity and Choice

Economics has to begin with the idea that people cannot have everything they want and need.

A need is something people have to have to survive….Air, Water, Food, Shelter

A want is something people desire but is not essential to survival…. A new car, Beats Headphones, etc.

To look at the world economically…. We focus on the decisions people make.

Economics is the study of how people seek to satisfy their needs and wants by making choices.

You have to decide how to spend your time…studying or going to the movies

Business have to decide how to produce or manufacture what they sell, how much to spend to produce it, and how many people to hire to make it.

City governments have to decide whether to spend budget money on a new park or to build a new school.

Quick Task: find a picture on the computer, take a pic on a cell phone, or cut one from a magazine – Give it a caption: Need or Want with who makes the choice; you, a business, or a government. Text, email, or bring it to school.

Scarcity In the US, we tend to have a problem thinking about scarcity due to full shelves and racks everywhere we go.

We have access to physical objects such as shirts and shoes, known as goods.

Services are activates one person performs for another; such as a haircut, or tutoring.

Scarcity means there is limited quantity of resources to meet unlimited wants.

A shortage occurs when producers will not or cannot meet current goods or services at current prices

Think About:

Be able to create a list of services, goods, resources,and shortages from the last 3 days at home.

Land

Labor

Capital

The natural resources used to produce goods and services

The effort individuals devote to production for a wage

Any human-made resource used to produce other goods and services

Entrepreneurs Inventive, ambitious, resourceful people that can combine Land, Capital, and Labor to create new goods and services.

Characteristics:Risk TakersSocial and Political LeadersExercise InitiativeDecision Makers

Vocab: ScarcityNeedsWantsNatural ResourcesEconomicsGoodsServicesShortageFactors of ProductionEntrepreneur

Thanks to Forbes, Inc., Google Images, And whatiseconomics.org