Ch 1- What is Economics?

What is Economics?Chapter 1

The study of how society organizes the production, consumption and distribution of goods and services.

What is Economics?

Either as a consumer or producerINDIVIDUALS make decisions: Consumers: those who buy & use Goods/Services

Producers: those who provide Goods/ServicesWho Makes Economic Decisions?

Services: activities or actions provided to consumers.

41) capital goods: equipment used in the production of other goods.2) consumer goods: the finished products.

Goods: physical objects used: Private Private Public Public

5A Need :

A Want :

A Need :A Want :to survivelive in comfort

The Study of economics begins with the concept, we cant have everything. Resource is defined as anything used to produce goods or services; man made, or all natural.Economic DecisionsEconomic decisions involve choices. Choices involve costs and provides benefits.

what do you have to give up? what do you gain?

Costs- Benefits-

Factors of ProductionResources used in producing goods & services

items provided by nature. human effort exerted in production.

equipment used to produce goods.

the persons who assume the risk involved in creating a new product or business.

land-labor- capital-entrepreneurs-

scarcityScarcity Human desires exceeds limited Resources available. (sooner or later a limit will be reached)This forces producers to make decisions of what to make or Allocate (to distribute) and consumers what to buy or use.

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Water!!

Tradeoffs- the decision to sacrifice one resource for another.

Scenario: A broke University High student is a huge Soccer fan who wants a Car. The student has an opportunity to work after school, at Burger King or join the soccer team. The Student decides to joins the Soccer team. What are the trade-offs?What are the costs & benefits of the their decision?Trade-offs:

Since we have to make choices and give some things up to receive our desired wants or needs.Opportunity Cost - is defined as the cost of giving up the next best thing in order to obtain something else (What we give up). Individuals must weigh the alternative choices: time, money, effort

costworthprice

: the expense of producing an item. : the value of an item expressed in money. : how much an item is selling for.

price worthcostcostworthprice Which is Which?

Production Possibility CurvesHow does the scarcity of resources impact the production possibilities curve?A - Shoes # 1B - Guns # 2C - all possible combinations of A & B

D - inefficient use of . resourcesAB C * D

These Graphs are used to analyze cost & trade-offs, to show related value.0 10 20 30 40 50 60 70 80 90 90

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0Production Possibility CurveAB C D *Line E represents aPossibility of Growth{Frontier}.EProduction can increase with an increase in technology &/or resources

14Word Up

Directions: On your paper please set it up like this for each key term.-- The Key term- A Visual, you will draw- Your Definition of term- Real Definitions

Oh my GodWHY!!

Teacher thanks for the best assignment ever!Key Terms:economicsresourcea needa wantConsumergoodsservicesscarcityallocatelaborlandcapital entrepreneurshiptrade-offopportunity cost