Intro to economics

What is economics? Economics: the study of how individuals and nations make choices about ways to use scarce resources to fulfill their needs and wants. ALSO the study of how things are made, bought, sold, and used. Scarcity: not having enough resources to produce all of the things we would like to have.

scarcity Scarcity is the driving force behind every economy. It’s what forces us to make choices about how to use our limited resources based on our needs and wants. Scarcity is created by a combination of unlimited wants and limited resources.

Needs vs. wants: What are some things we need? What are some things we want?

resources In order to make stuff, you need RESOURCES! This includes everything that goes into the production of an item or service. Ex: to make a log, you need a tree, an axe, and a person with lumber-cutting skills. We’ll go over specific types of resources later on.

decisions Countries have limited resources and have to make choices about: What to make How to make it Who to make it for