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Understanding Economics: Discovering Scarcity

Dive into Economics with an exploration of scarcity, principles, and concepts. Engage in activities to grasp macro and microeconomics, positive and normative economics, and the fundamental principles guiding economic decisions.

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Understanding Economics: Discovering Scarcity

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  1. Today’s Objectives – Day 1 • We will… • Role Call and Syllabus review • Economic Activity: Discovering Scarcity • Chapter 1 Notes • You will… • Understand the course and its expectations • Have a better understanding of how scarcity and how it connects to Economics • Understand basic concepts of Economics including scarcity, positive and normative economics and the 7 principle of Economics

  2. Discovering Scarcity • 1. Get into groups of 3 or 4 • 2. Scarcity Exercise

  3. Activity Questions • 1. How did this activity exemplify the economic principle of scarcity? • 2. What were some of the thoughts behind choosing a preference? • 3. How does scarcity affect your daily life? Think of an example.

  4. Economic thinking What you need to remember to be a good student of economics

  5. What is Economics? • Economics is… • A Social Science • A study of how resources are used to their fullest potential • NOT directly concerned with money or politics or the stock market • When you are trying to make the most out of what you have you are doing… Economics

  6. Macro vs. Micro • What do you think is the difference between the prefixes “macro” and “micro”? • Write in on your note sheet • Compare it to a partner.

  7. Macro vs. Micro • Macroeconomics = economic issues of a nation • Microeconomics = economic issues of the individual and/or firm

  8. Examples of Types of Economics • What is an example of a macroeconomic issue? • What is an example of a microeconomic issue?

  9. Positive and Normative Economics • Positive Economics • Gives a concrete estimate to an issue • Focuses on facts and cause and effect relationships • Based on scientific method • Normative Economics • Uses value judgments and opinions • Used to find the “best option”

  10. Positive Economics Normative Economics

  11. 7 Principles of Economics • PEOPLE CHOOSE • Scarcity forces people to choose 1 option over another • Ex: Sleep or get to school on time • PEOPLE’S CHOICES INVOLVE COST • Every choice has a cost and benefit • Ex: Sleep in = more rest, but potential punishment OR No sleep = no punishment

  12. 7 Principles Continued • LIFE IS LIVED ON A MARGIN • Each additional item added has a marginal cost and a marginal gain – is one more worth it? • Ex: The GUM CHALLENGE • PEOPLE RESPOND TO INCENTIVES IN PREDICTABLE WAYS • Incentives always change people’s decisions • Ex: Sales – If two products are available and one is on sale while the other isn’t, people may choose the cheaper one even if it’s a lesser quality

  13. 7 Principles Continued • PEOPLE GAIN WHEN THEY TRADE VOLUNTARILY • You can’t do everything – you trade • MARKETS COORDINATE TRADE • Markets bring people together perfectly without intervention • PEOPLE’S CHOICES HAVE CONSEQUENCES IN THE FUTURE • A choice today affects you and others later • Ex: Going to lunch may mean you don’t have enough money for the concert this weekend.

  14. EXIT SLIP 3-2-1 • LIST THREE WAYS YOU USE ECONOMICS IN YOUR DAILY LIFE • DEFINE THE TWO FIELDS OF ECONOMICS • WRITE ONE NEWSPAPER HEADLINE WHICH ILLUSTRATES POSITIVE ECONOMICS

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