Intro to Economics.

Slides:



Advertisements
Similar presentations
What is economics?.
Advertisements

What IS Economics?.
It’s the Economy, Stupid!! Or…why economics matters to you.
Nine Principles of Economic Thinking National Council for Economic Education (NCEE)
Ten Principles of Economics
 Study 5 hours – get B  Study 6 hours – get B +  What is the marginal benefit?  What is the marginal cost?
Unit 1 : MicroeconomicsVisual 1.4 National Council on Economic Educationhttp://apeconomics.ncee.net Absolute Advantage and Comparative Advantage ABSOLUTE.
Lesson Objectives: By the end of this lesson you will be able to: *Explain why every decision involves trade-offs. *Summarize the concept of opportunity.
ECONOMIC REASONING PRINCIPLES (AKA “ERP’S). How Do We Define Economics? The study of how people seek to satisfy their wants and needs by making choices.
Standard SSEF1 The student will explain why limited productive resources and unlimited wants result in scarcity, opportunity costs, and tradeoffs for individuals,
Personal Finance Lesson on What is the economic way of thinking?
Economics BasicsChoices Part 1Choices Part 2Incentives Trade & Markets
Unit 1, Lesson 1 THE ECONOMIC WAY OF THINKING. EVERYTHING HAS A COST The basic idea that “there is no such thing as a free lunch.” EVERY action costs.
8 Basic Principles Economics: study of how people choose to use scarce resources to satisfy their wants.
What do you think this book is about? How does it relate to Economics? Answer on pg. 12.
Economic Way of Thinking By: Mr. Hinsvark Information from: AP Economics Teacher Resource Manual NCEE.
Economics 101. Economics  Is a Science that examines how goods and services are produced, sold, and used.  It involves how people, governments and businesses.
THE ECONOMIC WAY OF THINKING According to John Maynard Keynes The Theory of Economics does not furnish a body of settled conclusions immediately applicable.
September 4, 2013 AP Economics 1.Attendance 2.Current Event? 3.Finish Website Tour? 4.Notes: Economics Intro (Ch.1)
Trade Off Trade-Off A trade-off is an exchange of one thing for another, or accepting less of one thing for more of another. For example, if you have the.
What is Economics? Basics and 6 core principles. Warm-up What do government tax revenue, water in Colorado, and good parking spots have in common?
The Economic Way of Thinking Do you think like an economist?
 A truth on which other truths can be based.  We always want more than we can get and productive resources (natural, human, financial) are always limited.
Chapter 1 Personal Financial Planning
Unit 1: Basic Economic Concepts
Do now: Text the to the number
Decision Making.
What is Economics? How do economists study the ways people make decisions on how to use their time, money, and resources?
Chapter 1: The Economic Way of Thinking Section 2: Economic Choice Today: Opportunity Cost (pg.12-17)
Chapter 1: An Economic Way of Thinking
Chapter 1: An Economic Way of Thinking
Power of the Market Free Enterprise.
Ten Principles of Economics
Economic Principles – chapter 18 _...
Adam smith 18th Century political economist and philosopher
Principle #1: People Face Tradeoffs.
Ten Principles of Economics
Ten Principles of Economics
The Ten Principles of Economics
A rare disease will claim 600 lives if we do nothing
What is the opportunity costs of
Economic Decision Making
10 Principles of Economics
Making Economic Decisions
Spring Semester MCS Economics.
An Economic Way of Thinking
Marginal Analysis and Opportunity Cost
AGENDA Turn in your homework (signed syllabus and getting to know you sheet) Last day to do this for full credit! Today: intro to economics – scarcity,
August 28th, 2014 AP Microeconomics
Chapter 1 Personal Financial Planning
Costs versus Benefits.
Decision Making Lesson 3.
Common Economic Concepts and Reasoning
Principles of Economics
Opportunity Cost Ch 1.2.
The Economic Way of Thinking
ES: Demonstrate intellectual courage
What is Economics? Chapter 1.
Characteristics of the Ideal Classroom
Random FACTS of the Day "Thirty-four percent of the adult population (18 and over) had degrees or certificates above the high school level in 2001." Sixteen.
Unit 1 - Intro to Economics
Principles of Economics
Principles of Economics
What is Economics? Chapter 1.
Unit 1 - Intro to Economics
Chapter 1 Section 2.
Unit 8.3 Demand and Supply Notes- Answers
Making Decisions.
Ten Principles of Economics
Intro Vocab.
Presentation transcript:

Intro to Economics

What is Economics? Economics is a social science that studies: How individuals, governments, and businesses make decisions Choices of how to get the most from limited resources The consequences of those decisions Economics gives us a new set of lenses through which to see the world, we call this the “Economic way of thinking”.

The Economic Way of Thinking Principle #1: Everything has a cost “There is no such thing as a free lunch”, or in other words nothing is free. Every action costs something: time, effort, or the lost opportunity to something else. We call these things opportunity costs So, even when it seems that we are getting something for free, everyone of our actions has some kind of cost!

The Economic Way of Thinking Principle #2: People choose for good reasons We constantly face choices, and we usually choose the alternative that gives us the best combination of costs and benefits. Our choices also depend on our values. (Ex. Do I want to go out to the movies with my friends or stay at home with my family?) Businesses and governments do not make decisions people do.

The Economic Way of Thinking Principle #3: Incentives matter! Incentives are costs or benefits that make us behave in predictable ways. Even though we tend to think incentives as positive, (ex. If you are good this month we get a free day) they can easily be negative. (ex. If you do not clean your room you cannot hangout with your friends) Any other examples of negative or positive incentives?

The Economic Way of Thinking Principle #4: People gain from voluntary and fair trade. People should only trade when they believe that trade makes them better off. In order for people to trade, they should have the right information and resources to ensure that they are making the right decision.

The Economic Way of Thinking Principle #5: Economic thinking is marginal thinking Marginal choices involve the effects of additions and subtractions from your current conditions. Ex. How are you going to feel if you eat one more candy bar? If you are still hungry and have a sweet tooth, then you will probably choose to eat another candy bar because it will bring you pleasure. But, if you are full then eating another candy bar might make you feel sick, therefore you will probably not eat it.

The Economic Way of Thinking Principle #6: The value of a good or service is affected by people’s choices. We give products their value, not companies. If nobody wants a product, it is going to be hard to even give the product away. If everyone wants it then the product has value and can be sold at higher prices. Jordans are not expensive because they are better than every other shoe, they are expensive because they are in high demand.

The Economic Way of Thinking Principle #7: Economic actions have secondary effects. Our actions may have unintended consequences. Example: In some NYC neighborhoods rent was getting so high that the city decided to establish rent controls to keep them from rising. Because of this more people began to buy apartments which created a shortage. Also, landlords were not repairing or maintaining their apartments because it was no longer profitable. So once luxurious apartments were not dumpy.