Today’s DOA Think of two products. Use the factors of production to explain the creation of your products. As you are working try to answer the what, how, and for whom to produce questions. PRODUCT LAND CAPATIAL LABOR ENTREPRENEUR NEED WANT

Introduction to Economics Economics as a Social Science

What is Economics? REMEMBER… Economics is the study of how people try satisfy their own needs/wants through the careful use of scarce resources.

Scarcity of Resources REMEMBER… Condition that results from not having enough resources to produce all the things you would like to have.

Factors of Production REMEMBER… Resources required to produce things we would like to have. Production refers to the process of creating goods/services. There are 4 factors of production: Land Capital Labor Entrepreneurs

Economics as a Social Science Economics studies the behavior of people as they deal with basic issues. There are four key elements to the study of Economics: Description Analysis Explanation Prediction

Economics as a Social Science DESCRIPTION: Describes the economic activity Value of currency Value of goods/services What is produced and how much Other factors – unemployment, trade, inflation, businesses, government

Economics as a Social Science ANALYSIS (why it works): Analyze economic activity Pricing - ↑ or ↓ Wages - ↑ or ↓ Taxes and the affect on people

Economics as a Social Science EXPLANATION (how it works): Explain economic activity Communicate to other people Common understanding Fix/resolve issues

Economics as a Social Science PREDICTION (future decisions): Predict economic activity Develop tendencies Find trends Prevention methods

Economics as a Social Science So, what does this all mean?... Economic decisions fall on US; based on our system of free market in a democratic society We are more informed citizens Helps lead us to better decision making

Exit Slip Describe 3 things you learned today. List 2 things that interest you. Name 1 thing that needs more clarification. Why is economics considered to be a social science? Why do economic decisions fall on us? Why is it important for us to understand the process of economics?