What is Economics?

Economics The study of the ways that individuals and societies allocate their limited resources in order to better satisfy their unlimited wants In other words…..

Dissection of the Definition Individual decision making is micro (small) The study of economic behavior and decision making of small units, such as individuals, families, and businesses

The study of behavior and decision making of the entire economies Societal decision making is macro (large) The study of behavior and decision making of the entire economies Examines major trends for the economy as a whole

To Allocate means to divide among or distribute in shares

Dissection of the Definition cont.. Resources are means to accomplish something Wants are things needed or desired

“The Science of Decision Making”- Handy Dandy Guide People Choose. People’s choices involve costs People respond the incentives in predictable ways. People create economic systems that influence individual choices and incentives.

People gain when the trade voluntarily. People’s choices have consequences that lie in the future.