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Introduction to Economics. Economics The study of how people seek to satisfy their needs and wants by making choices. Need - Something like air, food, or shelter that is necessary for survival Want – An item that we desire but that is not essential to survival. Scarcity.

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introduction to economics
Introduction to Economics
  • Economics
      • The study of how people seek to satisfy their needs and wants by making choices.
        • Need - Something like air, food, or shelter that is necessary for survival
        • Want – An item that we desire but that is not essential to survival
scarcity
Scarcity
  • Using limited quantities of resources to meet unlimited needs and wants.

Goods & Services

FOP’s

NEEDS & WANTS

an economic system
An Economic System…
  • Organizes its resources to distribute goods and services to its citizens
  • What are the economic resources?
factors of production
C

E

L

L

apital

ntrepreneurship

and

abor

Factors of Production
slide5
Capital
      • Investment in goods that can produce other goods in the future
        • Human Capital
          • Education and training, whether formal or on-the-job
        • Physical Capital
          • Machines, roads, factories, schools, and office buildings
entrepreneurship
Entrepreneurship
  • Creative, risk-taking use of the factors of productions in order to…

MAKE A PROFIT

Dave Thomas

G.W. Carver

Sam Walton

Henry Ford

slide7
Land
      • Naturally-occurring goods
        • Ex:
          • Water, air, soil, minerals
slide8
Labor
      • Human effort used in production
factors of production category land labor capital good entrepreneur consumer good
Resource

Pine tree

Teacher

Telephone

Chain saw

Lawn mower

Receptionist

Natural gas

Drayton McClane

Crude oil

farmer

Category

Land

Labor

Capital & Consumer

Capital & Consumer

Capital & Consumer

Labor

Land

Labor and Entrepreneur

Land

Labor and Entrepreneur

Factors of Productioncategory = land, labor, capital good,entrepreneur, consumer good
trade off vs opportunity cost
Trade off vs. Opportunity cost
  • Trade off
      • An alternative we sacrifice when we make a decision
  • Opportunity Cost
      • The value that is given up when making that decision
identify the trade off and opportunity cost in the following
Identify the trade-off and opportunity cost in the following.
  • A nation can make either pizzas or robots. They pick pizzas. Trade-off?
  • Robots
  • Opportunity Cost?
  • The value of the robots
  • Going to school versus a full-time job. Trade-off?
  • Job. Opportunity cost?
  • The salary you aren’t going to receive
slide12
Car companies retool to make more hybrids than SUVs.
  • Trade-off? The SUVs. Opportunity Cost?
  • Loss of sales from the SUVs
  • Going to the movies or going to see grandma. You pick the movies.
  • Trade-off?
  • Granny. Opportunity Cost?
  • The value of the time spent with grandma.
slide13
To cheat on a test or to be honest. Pick—cheat. Trade-off?
  • Honesty,integrity, reputation
  • Opportunity cost?
  • The value you attach to those things