If I were to write a check to you right now for an amount that was large enough so that you would never have to worry about money ever again, what is the minimum amount of how much would it have to be?

Your most unique purchase

What do the following people have in common?

MC Hammer

TLC

Donald Trump

Henry Ford

Kim Basinger

Walt Disney

Toni Braxton

Wayne Newton

What’s Economics? February 2018

3 Basic Needs Economists say that everyone has 3 basic needs, what do you think they are? Food/Water Clothing Shelter

Limitless, endless What does infinite mean? What does finite mean? Limited

Human beings have UNLIMITED wants/desires Discussion Question: Human beings have UNLIMITED wants/desires Agree or Disagree and why?

1 Important Assumption in Economics: People have unlimited wants

Anything that people can use to make or obtain what they need or want Resource – Definition Anything that people can use to make or obtain what they need or want Examples

Factors of Production Things used to produce goods & services. Also known as resources

Types of Resources 5 types of Resources:

Land Natural Resources (all things found in nature) that can be used to make or obtain things Examples

Labor Work that people do Examples

Man-made items that people use to make other goods and/or services Capital Man-made items that people use to make other goods and/or services Examples

Capital

Technology Use of science to develop new products & new methods for producing & distributing goods & services

Organizing/managing resources Entrepreneurship Organizing/managing resources

Infinite = Unlimited List as many tangible (things you can touch) things that you can think of that are infinite

2nd Major Assumption in Economics: All Resources are Limited/Finite

We have to make decisions Unlimited Desires + Limited Resources Therefore: We have to make decisions

BASIC PROBLEM OF ECONOMICS Scarcity People do not & cannot have enough income, time, or resources to satisfy their every desire & so we have to make decisions

Economics – Formal Definition The study of how people & nations make choices about how to use scarce resources to fill their needs & wants

Practiced by people in suits & offices $ Economics is not just . . . Taxes Company decisions Practiced by people in suits & offices $

C.R.E.A.M Economics is . . . Ubiquitous (everywhere) Inescapable Cash Rules Everything Around Me

Economics is. . . (cont’d) Decision-making Making informed decisions based on information made available to you in order to make the most of what you have so you can get all of what you need & much of what you want

Trade-Offs All of the things that had to be given up when a decision was made.

Opportunity Costs The next best alternative that had to be given up when a decision is made

Opportunity Costs Cont’d Doing the next homework assignment List your opportunity cost

What is gained by making a particular choice Opportunity Benefit What is gained by making a particular choice

Opportunity Benefits Cont’d List your Opportunity Benefit to doing tomorrow’s homework assignment