 I can understand the definition of Economics.  I can understand why people have to make choices and that with choosing comes consequences.  I can understand that with every benefit there is always a cost.  I can understand that incentives help to set goals.  I can understand that setting goals helps in the efficient use of scarce resources.

 Economics  Scarcity  Opportunity Cost  Income  Consumption  Saving  Incentives  Cost  Benefit  Goals  Budget  Utility  Choice  Consumer  Producer  Wages  Short-term  Long-term

 Standard 1 : Scarcity Productive resources are limited. Therefore, people can not have all the goods and services they want; as a result, they must choose some things and give up others. Standard 1 : Scarcity  Standard 2 : Marginal Cost/Benefit Effective decision making requires comparing the additional costs of alternatives with the additional benefits. Most choices involve doing a little more or a little less of something: few choices are "all or nothing" decisions. Standard 2 : Marginal Cost/Benefit

 Standard 3 : Allocation of Goods and Services Different methods can be used to allocate goods and services. People acting individually or collectively through government, must choose which methods to use to allocate different kinds of goods and services. Standard 3 : Allocation of Goods and Services  Standard 4 : Role of Incentives People respond predictably to positive and negative incentives Standard 4 : Role of Incentives

A Cost is something you give up in making a choice and a Benefit is something you gain. What would be the costs and the benefits of doing this now?

WHY MUST YOU CHOOSE? BECAUSE OF SCARCITY Why have you chosen to do this instead? What are the costs and benefits?

SCARCITY TELLS ME I CAN’T DO BOTH, I HAVE TO MAKE A CHOICE. SINCE YOU CAN’T HAVE EVERYTHING YOU WANT ECONOMICS HELPS US GET THE MOST OUT OF WHAT WE CAN HAVE.

 TIME: There is not enough of it to do all of the things you want to do.  MONEY: There are a lot of things you would love to buy now, but what about all of the things you’ll want in the future?  LIFE: We are only on this planet for so long so the quality of our years matter.  HEALTH: Human beings are not indestructible and there are limits we must recognize.  FIRST IMPRESSIONS: There is only one so you better make it a good one.

Have you ever heard the phrase: “There’s no such thing as a free lunch”?

EVEN THOUGH THE SIGN SAYS SO, IS IT TRULY FREE? I MAY NOT GIVE UP MONEY, BUT WHAT AM I GIVING UP BY ATTENDING?

What is the Opportunity Cost of the following decisions?  Buying a gift for a friend.  Working at a job after school  Waiting on line for an hour to buy a new cell phone  Saving 50% of this weeks paycheck. Did you all have the same answers? Why not?

Economics is the study of how people make choices. When you make a good economic decision the benefits will be greater than the costs.

He made a good decisionHe made a bad decision

SETTING GOALS CREATES A TARGET FOR YOU TO AIM FOR AND GIVES PURPOSE TO THE USE OF YOUR SCARCE RESOURCES.

SHORT-TERM GOALSLONG-TERM GOALS  SPEND TIME WITH YOUR FAMILY  GET GOOD GRADES THIS SEMESTER  BUY A NEW PHONE  EAT BETTER  TRAVEL DURING MY NEXT VACATION  FIND A JOB  OPEN A SAVINGS ACCT.  GET INTO A GREAT COLLEGE  OWN A HOME  BE FINANCIALLY INDEPENDENT  HAVE A GREAT CAREER  RETIRE WHEN I AM 40  TRAVEL AROUND THE WORLD  HAVE A BIG HAPPY FAMILY OF MY OWN

INCENTIVES are things such as rewards that motivate a person to do something. Punishment is meant to be a disincentive.

YOUR GOALS ARE DETERMINED BY WHAT IS IMPORTANT TO YOU. ACCOMPLISHING THEM IS THE REWARD.

OVER TIME, YOUR SHORT-TERM GOALS CHANGE AS YOUR PRIORITIES CHANGE. THINK ABOUT THINGS THAT ARE IMPORTANT TO YOU NOW THAT WON’T BE SO IMPORTANT IN THE FUTURE?

 SCARCITY TELLS US WE CAN’T HAVE EVERYTHING WE WANT  EVERY DAY OF OUR LIVES WE HAVE TO MAKE CHOICES  IN MAKING CHOICES WE WEIGH THE BENEFITS AGAINST THE COSTS  NOTHING IS FREE, THERE IS ALWAYS AN OPPORTUNITY COST  A GOOD ECONOMIC DECISION CREATES MORE BENEFITS THAN COSTS  INCENTIVES HELP US TO CHOOSE  SETTING GOALS HELPS TO FOCUS

OR

WORK/ALLOWANCE GIFTS/GAMBLING/FOUND

It’s the Motorola DynaTAC 8000X, the world’s first cell phone. It went on sale March 6, 1983 and the initial price was $3995 ($10,000 in today’s dollars). It had enough battery life for 30 minutes of talk, cost $5/minute to talk and there was a waiting list of thousands anxious to buy it. WHY WOULD ANYONE BUY THIS?

BECAUSE: IF YOU SAVE TO BUY SOMETHING IN THE FUTURE, YOU CAN NOT BUY SOMETHING TODAY

 Trade-offs require a sacrifice in order to achieve satisfaction  Immediate gratification is a strong incentive to act  Income is earned from many sources  People buy things if they provide utility  Buying something today results in the inability to buy something in the future  Saving is hard because it delays gratification