Introduction to Economics

What is Economics? Economics: the study of how people seek to satisfy their needs and wants by making choices

Needs vs. Wants Need: something that is necessary for survival (ex: air, food, shelter) Want: an item we desire but that is not essential to survival

Why do we have to make these choices???? SCARCITY!!!! (but first…) Goods: physical objects such as shoes and shirts Services: actions or activities that one person performs for another (ex: haircuts, tutoring, dental checkups, etc)

What are some things you WANT? List 5 things you want more than anything 

Trade-Offs Out of the 5 things you want, choose the thing you want THE MOST! All items not picked are called Trade-Offs

When I make a choice… I give something up” When I choose to get distracted, I give up the opportunity to learn When I choose to slack off, I give up the opportunity to get things accomplished

When you give up an opportunity, this is known as Opportunity Cost

Scarcity Scarcity: limited resources to meet unlimited wants ** All goods and services we produce are scarce!!!!!!

More on Scarcity… Scarcity always exists because our needs and wants are always greater than our resource supply. Goods and services are scarce because they are all made from resources that are scarce.

Shortage Shortage: NOT the same as scarcity. A shortage occurs when producers will not or cannot offer goods or services at the current prices Can be temporary or long term. (wars and droughts can create shortages)

GOAL OF ECONOMICS Solving the problem of scarcity!