Warm Up – April 25 Why is it important to have insurance? Answer the following questions on a post it: Why is it important to have insurance? What is the difference between net pay and gross pay? What factors create the difference between the two? What are some factors an individual should take into account when getting a credit card?

Introduction to Economics Unit 7: The Economy Introduction to Economics

WANT v. NEED A NEED is something necessary for survival A WANT is something that is not required, but you would like to have it. Examples of NEEDS-water, shelter, food, clothing (in our society MONEY), medical care Examples of WANTS-more money, electronics, jewelry, brand name clothes Why is it important to distinguish between the two?

WANT v. NEED When can something be considered both a want and a need? MONEY-We need money to buy goods, but we want more money. CAR- We may want a car, but we also may need one to get to school/work. COMPUTER-Computers can be wants, but depending on your job/education it may also be a need.

What is Economics? Economics - the study of how we make choices in a world full of limited resources. MICROeconomics - The study of how individuals and small businesses make decision. MACROeconomics - The study of how the government and society makes decisions.

HOW DO CHOICES IMPACT THE ECONOMY? CONSUMERS BUSINESSES GOVERNMENT

SCARCITY RESOURCES-the materials used to make products SCARCITY- There are not enough resources to satisfy our wants and needs, because our needs are limitless. SCARCITY will always exist because no matter what we have we will always want and need more.

Questions in dealing with scarce resources: WHAT to produce? HOW to produce it? WHOM to produce it for? Scarce resources force interdependence (people and governments to rely on each other)

Free Market vs. Command Economies Free Market Economy – economic system in which the decisions regarding investment, production, and distribution are guided by the price signals created by the forces of supply and demand. Supply and demand - the amount of a commodity, product, or service available and the desire of buyers for it, considered as factors regulating its price. Command Economy - an economy in which production, investment, prices, and incomes are determined centrally by a government. Mixed Economy – combines both Market and Command Economies

TOD – April 25 Answer the following questions on the same post it as the warm up: 1. What is the difference between a want and a need? 2. What is the definition of economics? 3. How do choices impact economics? 4. What is scarcity? Why will scarcity always exist? 5. How does scarcity force populations to pick and choose how they spend their time and money? 6. What is the difference between a market economy and a command economy?