Introduction to Economics

economics The study of how people, businesses, and nations make choices

scarcity When you have a limit of something, how do you use it for the best?

goods Things that can be seen, touched, and bought or sold Ex. Sunglasses Popcorn books

services An activity/action done for other people to get money Ex. Teaching Cleaning

resources Things that can be used to produce/make goods and services

needs Things everyone needs to live/survive Ex. Food Clothing Shelter/home

wants Things people would like to have/desire Ex. TV Pager car

Four factors of production Things needed to make goods and services Natural resources – sunlight, water, air, land, etc… Labor - workers Capital – things like machines and tools that are used to make goods and services Entrepreneurs – people with ideas for making new goods and services

Opportunity cost People have to make choices When you make a choice, one choice wins and one choice loses Opportunity cost is what is lost when you choose