Welcome to Economics Economics is a required course for graduation. A great economist once said that Economics is “the study of mankind in the ordinary business of life.” E. Napp

EQ : What is economics and how do economi choices impact my life and the lives of others? Content Standard 1: The student will develop and apply economic reasoning and decision-making skills. 1. Define and apply basic economic concepts of scarcity, surplus, choice, opportunity cost, cost/benefit analysis, \ risk/reward relationship, incentive, disincentive, and trade-off to a variety of economic situations.

E. Napp Studying Economics will help us in our daily lives.

So, what is Economics?  The dictionary definition of Economics is that Economics is the study of the production, distribution, and consumption of goods and services.  But Economics is much more than that. E. Napp

Here’s a clue: No matter how much money we have, we always want more. Yes, we always want more.

Why do we always want more?  Economists believe in a concept called scarcity.  Scarcity is the idea that our resources are limited but our wants and desires are unlimited.  Think about it. Twenty dollars can buy many different goods. Is there only one item you want? Or would you like more ? E. Napp

We have so many options but we must choose. We cannot have everything.

Scarcity  To think like an Economist, you must always remember that scarcity exists.  You may only have ten dollars in your pocket but you can certainly think of a hundred different ways to spend it. E. Napp

So, how do we choose?

Economics Can Help  As we study Economics, we begin to understand that we must make choices.  We begin to understand that we cannot have everything we need or want.  We begin to understand that with every choice, there is a cost. E. Napp

If we choose to live near the ocean, we are more likely to experience flooding.

Every Choice Has Its Cost  Economists also teach us that every choice we make has its cost.  In other words, every time we get something, we give something else up.  There is no such thing as a free lunch. E. Napp

If we surf the waves, we may break our legs. Even fun activities have their costs.

E. Napp Economic is all about making choices and knowing the costs of those choices.

Questions for Reflection  Define Economics.  Why must people make choices?  Define scarcity.  Why do our choices cost us?  Define cost.  Why is Economics a required course for graduation? E. Napp

Scarcity and the Factors of Production In this lesson, students will be able to define the following key concepts: Scarcity Economics The Factors of Production Entrepreneur

E. Napp In a magical world, there is no need for Economics but we live in a world of Scarcity. We need Economics.

E. Napp Wouldn’t it be nice if we could just wave the magic wand and multiply our dollars?

E. Napp Economics  Due to scarcity, we cannot have everything we want or need.  Therefore, we have to make choices.  Economics is the study of the choices we make.

E. Napp Which will you choose in a world of limited resources?

E. Napp The Factors of Production  Whenever we make a good (an object) or a service (an action performed), we need the Factors of Production.  The Factors of Production are: Land ( Natural Resources) Labor (Paid Workers) Capital (Money and Machines)

E. Napp Name the Factor of Production addressed in this diagram.

E. Napp Entrepreneur  An entrepreneur is a person who puts together land, labor, and capital to make new businesses.  If your mother opened her own business, she is an entrepreneur.  Bill Gates is also an entrepreneur.