Intro to Economics Unlimited Wants and Limited Resources

I) Intro the Econ A) economics – the study of the decisions involved in producing, distributing, and consuming goods and services

I) Intro the Econ A) economics – the study of the decisions involved in producing, distributing, and consuming goods and services 1) goods are tangible, they are physical

I) Intro the Econ A) economics – the study of the decisions involved in producing, distributing, and consuming goods and services 1) goods are tangible, they are physical Services are intangible, things people do, not objects

II) Unlimited Wants and Limited Resources A) scarcity – situation where there are not enough products to satisfy people’s needs or wants

II) Unlimited Wants and Limited Resources A) scarcity – situation where there are not enough products to satisfy people’s needs or wants B) Scarcity is based on two ideas:

II) Unlimited Wants and Limited Resources A) scarcity – situation where there are not enough products to satisfy people’s needs or wants B) Scarcity is based on two ideas: 1) there is no limit to what we want

II) Unlimited Wants and Limited Resources A) scarcity – situation where there are not enough products to satisfy people’s needs or wants B) Scarcity is based on two ideas: 1) there is no limit to what we want 2) however, there is a limit to our ability to produce those goods and services

II) Unlimited Wants and Limited Resources A) scarcity – situation where there are not enough products to satisfy people’s needs or wants B) Scarcity is based on two ideas: 1) there is no limit to what we want 2) however, there is a limit to our ability to produce those goods and services  a) ex. Playstation 3

II) Unlimited Wants and Limited Resources A) scarcity – situation where there are not enough products to satisfy people’s needs or wants B) Scarcity is based on two ideas: 1) there is no limit to what we want 2) however, there is a limit to our ability to produce those goods and services  a) ex. Playstation 3  b) in a state of scarcity, no matter how much we make, someone will always want more

C) This means that the consumer must choose

1) therefore, what ever you spend your money on is the item you want most, b/c you gave up something valuable to receive it

C) This means that the consumer must choose 1) therefore, what ever you spend your money on is the item you want most, b/c you gave up something valuable to receive it a) ex. You have $100, do you by a t-shirt from Abercrombie, or 5 DVDs

C) This means that the consumer must choose 1) therefore, what ever you spend your money on is the item you want most, b/c you gave up something valuable to receive it a) ex. You have $100, do you by a t-shirt from Abercrombie, or 5 DVDs b) this does not mean money is scarce, rather that these items are so valuable to us, that we are willing to give up something of value (money) to get them

C) This means that the consumer must choose c) if I could produce the DVDs, I would not need to give up the valuable $ for them

D) Businesses must choose as well

1) their choices are based upon making a profit

D) Businesses must choose as well 1) their choices are based upon making a profit a) ex. What will make more money, PS3 or Atari system

E) Governmental Choices 1) only have so much money and services to spend

E) Governmental Choices 1) only have so much money and services to spend 2) if they dedicate all resources to one source, others will suffer

E) Governmental Choices 1) only have so much money and services to spend 2) if they dedicate all resources to one source, others will suffer a) ex. “star wars” defense program, spent a lot of $ on it, while ignoring other needs like education b) what basis does the gov’t make their decisions?

III) Opportunity Costs A) trade-offs – decisions that must be made between two choices

III) Opportunity Costs A) trade-offs – decisions that must be made between two choices B) When this decision is made, the alternative, the item you don’t choose is known as the opportunity cost

III) Opportunity Costs A) trade-offs – decisions that must be made between two choices B) When this decision is made, the alternative, the item you don’t choose is known as the opportunity cost 1) opportunity cost – value of the not taken choice in a trade-off

III) Opportunity Costs A) trade-offs – decisions that must be made between two choices B) When this decision is made, the alternative, the item you don’t choose is known as the opportunity cost 1) opportunity cost – value of the not taken choice in a trade-off  a) this can be $ or time

III) Opportunity Costs A) trade-offs – decisions that must be made between two choices B) When this decision is made, the alternative, the item you don’t choose is known as the opportunity cost 1) opportunity cost – value of the not taken choice in a trade-off  a) this can be $ or time  b) ex. After school job vs. sport

C) Life is a series of trade-offs

1) they can be positive or negative

C) Life is a series of trade-offs 1) they can be positive or negative a) ex. Take a job and earn money, plus you don’t get inured playing a sport

C) Life is a series of trade-offs 1) they can be positive or negative a) ex. Take a job and earn money, plus you don’t get inured playing a sport b) ex. Take a job, don’t earn an athletic scholarship