Introduction to Economics

What is Economics? Economics is the study of people producing and exchanging to get the goods and services they want. Simply put economics evaluates the choices people and countries make in producing, selling and buying.

Wants People have basic wants like food, clothing and shelter. Wants are influenced by: where you live, society you live in, age, etc

How people use resources Factors of production: (Resources people have and use to help produce goods and services) Labor – Physical work done by people Land – Natural Resources Capital – Money, machines, equipment, etc

CONSUMER & PRODUCER A consumer is one who buys and uses goods and services. A producer is someone who makes or provides goods and services.

OPPORTUNITY COSTS Opportunity cost is the greatest value (benefit) given up when a choice is made. This does not mean money only. It can also include time, effort, etc.

SCARCITY Scarcity – Resources are limited based on the variety of people’s wants. Examples: Oil, diamonds, food, etc

BASIC ECONOMIC QUESTIONS What do you produce and how much of do you produce? How to produce the goods or services? Who is going to purchase (get or use) the product or service?