Introduction to economics
1 / 26

Introduction to Economics - PowerPoint PPT Presentation

  • Uploaded on

Introduction to Economics. Economics Warm-up. Make TWO charts: Listing three scarce resources in your life and in the world Listing three wants and three needs of you AND the federal government. Economics. Economics —the study of choices that people make to satisfy their wants and needs

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

PowerPoint Slideshow about 'Introduction to Economics' - brinda

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

Economics warm up
Economics Warm-up

  • Make TWO charts:

    • Listing three scarce resources in your life and in the world

    • Listing three wants and three needs of you AND the federal government.



Economics—the study of choices that people make to satisfy their wants and needs

Microeconomics—the study of choices made by economic actors such as households, companies, and individual markets

ex.—anytime you buy something or your grocer orders it

Macroeconomics—the behavior of entire economies

ex.—trade agreements and government regulations


  • What type of economics studies the European Union and the North American Free Trade Agreement?

  • What type of economics studies the interaction among consumers & producers?

  • What type of economics tries to figure out why the dollar is decreasing in value compared to the euro or Canadian dollar?

  • What type of economics studies you choice of getting married after high school instead of going to college?

  • In one word, what is economics about?

Economic decisions
Economic Decisions

  • Who makes decisions?

    • consumers—people who decide to buy things

    • producers—people who make the things to satisfy peoples needs and wants

  • How do you make decisions?

    • A balance of wants v. needs in terms of goods/services

      • want—consumption beyond survival

      • need—goods/services necessary for survival


  • Resources—the factors of production that are used in the production of economic goods and services

  • There are four factors of productions: all are scarce

    • Land-natural resources

      • minerals, water, air, vegetation

        • success of an economy is tied directly to quality & quantity of these

    • Labor-human resource element

    • Capital –goods used in production of other goods & services

      --What goods are commonly used in your house?

      --What resources were used to make those?

      --What other goods could be made w/ those resources?

      --Difference between consumer & capital good

      -consumers good is meant for immediate consumption

    • Entrepreneurship—sees an economic need and tries to fill it (risk taker)

      • manages all other factors


  • Make a table of four examples of each factor of production.


  • Consumers make decisions by trying to balance ______________ and _________________.

  • What is the difference between a consumer good and a capital good? Give examples of both.

  • List the 4 factors of production and provide an example of each. Now try to think of an example of each that is scarce.

  • What is the world’s most important resource? Is it scarce?

  • What goods/services would you find difficult to live without?

  • What goods/services would you tell people to give up to save money?

Critical thinking about economics
Critical Thinking about Economics

  • “It has been said that if you give a person a fish you feed him or her for a day. If you teach this person to fish, however, he or she will be fed for a life.” In what ways do you think that this relates to the factors of production?

  • If you give someone a final product, you teach them nothing about factors of production. If you teach them you have to show them a good spot (land), get a rod, reel, and tackle (capital), the art of fishing itself (labor), and managing the catch requires cleaning salting, storing freezing, and cooking (entre.)

Basic economic problem
Basic Economic Problem

Need to make choices

  • Unlimited wants v. limited resources

    • What do you buy w/ your paycheck or allowance?

    • How do you decide what to buy when you can’t have everything you want? Or what is more important?

  • Everyone at all income levels have to make necessary choices? No one person, business, or government can afford all of their wants.

Basic economic problem1
Basic Economic Problem new grading policy at River Valley High School.

  • Scarcity

    • there is always some gap between what the consumer would like and what the consumer can get.

      • common sense tells us that some trade-offs have to be made

  • Trade-offs

    • the process of giving up one desire in order to satisfy another desire.

  • Opportunity Costs

    • the value of what is given up in a trade-off.

    • If a government decides to cut taxes instead of hire new teachers or park rangers, “What is the opportunity costs?”

    • If a business decides to give employees raises instead of investing in the business, “what is the opportunity costs?”

    • opportunity costs can have large impacts on a person’s life. If you drop out of school then the opportunity costs are the foregone salary of an educated person which is almost always going to be higher. The same can be said for committing a crime and going to jail. The opportunity cost here is a few years to a life of freedom.

  • Opportunity costs
    Opportunity Costs child to understand? Why?

    • The classic example of opportunity costs that economists use is “guns v. butter”. What are the guns? What is the butter? How is this opportunity cost exemplified?

    Opportunity child to understand? Why?Costs

    Unlimited Wants and Needs

    Limited Resources




    Opportunity Costs

    The value of the next best alternative.

    Opportunity costs1
    Opportunity Costs child to understand? Why?

    • Make a list of three major decisions you have made in the past or think you will have to make in the future.

    • Now make a list of all possible options for your decisions. These are potential trade-offs.

    • Now share what each decision is.

    • Now pick the next best alternative for each. This is your opportunity costs. Everything else is trade offs.

    • Example…My friends Ryan and Lisa live in Colorado and we plan to spend Spring break together. What to do?

      • Great Basin National Park, Death Valley, Las Vegas, Moab, fly them to Chico

      • Fly them to Chico.

      • Opportunity Cost: Las Vegas…meaning, I don’t get to gamble at the casino, hike in Red Rocks Park, boat & camp at Lake Mead, see Hoover Dam…again.

      • Trade-offs: Great Basin, Death Valley, Moab…desert camping in general

    Opportunity costs2
    Opportunity Costs child to understand? Why?

    • Although Cheyanne Snyder of Frankfort, Indiana, does not enjoy getting parking tickets, she gets one every day. The fee to park her car in a garage is $4 per day. But she parks illegally in the street because a parking ticket costs her only $2.

    • Briefly explain how this story illustrates scarcity and choice.

    • Does Cheyanne bear an opportunity cost if she parks in the street or in the garage?

    • Briefly explain why Cheyanne’s decision to park on the street and get a ticket is wise or foolish.

    Free lunch
    Free Lunch! child to understand? Why?

    One of the favorite phrases of economists is, “there is no such thing as a free lunch.” What does this mean? What economic concept is it illustrating?

    Production possibilities curve

    Production Possibilities Curve child to understand? Why?

    Production possibilities
    Production Possibilities child to understand? Why?

    • A production possibilities curve shows all of the possible combinations of TWO goods or services that can be produced within a stated time period.

    • Two assumptions—

      • 1. the amount of resources and technology will not change;

      • 2. all natural, human and capital resources are being used in the most efficient manner possible.

    Production possibilities curve1
    Production Possibilities Curve child to understand? Why?

    • Use a ruler to help you draw the Production Possibilities Curve below your notebook. It should be large enough for you to write notes in it. Make sure you include all of the points A-D as well.

    Production possibilities curve2
    Production Possibilities Curve child to understand? Why?

    A-B (on the curve)=most efficient use of resources…best choice

    D (inside the curve)=inefficient use of resources. Possible but not ideal.

    C (outside the curve)=impossible to produce with the resources available.

    Shifting production possibilities
    Shifting Production Possibilities child to understand? Why?

    • If more resources become available, the production possibilities curve will shift to the right.

    • If fewer resources are available, the production possibilities curve will shift to the left.

    • On your production possibilities curve, draw a new curve showing what would happen if government raised taxes.


    Exchange child to understand? Why?

    Homework child to understand? Why?

    • Read chapter 1, section 4 and complete the chart on the following slide.

    As you read section 4 fill in the following chart then answer the question
    As you read Section 4, fill in the following chart. Then answer the question.

    • Describe the benefits and limitations of interdependence.