Economics Decisions, Decisions… 1

Types of Economics Microeconomics (micro = “small”) Studies the behavior of individual people and firms. Macroeconomics (macro = “large”) Studies the behavior of entire economies as a whole. 23

What is Microeconomics? Microeconomics is the study of the economic behavior and decision making of small units, such as individuals, families and businesses. What does that mean? 5

Less Formally... There is not enough of everything that people want (and need) to go around. Some people will get things and others will not. That is a fact. How do we determine who gets what? 6

Decisions: Where to Start? Knowing your Values!! Values: The standards by which you live; principles. Values = Judgments Right vs. Wrong Good vs. Bad Important vs. Unimportant

Decisions (Continued) Personal Values Life Values: Most important to you in life Work Values: Most important to you in your work Social Values Values held by a great number of people in a society

Decisions (Continued) Goals: What you want to accomplish in your life Needs/wants, hopes/dreams Needs: Things you can’t live without Wants: Things you would like to have but can live without

Trade-off Trade-Off is an alternative we sacrifice when we make a decision. Opportunity Cost is the next alternative forgone when using a resource. Your opportunity cost of watching TV might be studying, talking on the phone or maybe even sleeping. But not all 3 -- only the one you value next best. 12

Tonight’s Assignment Due Friday Write at least two paragraphs about one of your own goals. Assignment should include: Explanation of your goal Some of your personal values Why is this goal important? What would be your opportunity cost? Due Friday