Chapter 1.  The basic problem in economics….is what?  How is the economy reported in the news?  How does this affect your life?  Did you know? Pg.

Slides:



Advertisements
Similar presentations
Economics Chapter 1 Section 1.
Advertisements

Chapter 1: What Is Economics?.
ECONOMIC PRINCIPLES Unit 1.
Def of Econ Opp Cost Decision Making PPF 100 pt 100 pt 100 pt 100 pt
What is Economics?. Definition: study of how individuals & societies make choices about ways to use scarce resources to fulfill their wants.
Basic Problems in Economics Economics The study of how individuals, families, businesses, and societies use limited resources to fulfill their unlimited.
1 Economic Decisions and Systems 1-1 Satisfying Needs and Wants
Chapter 1 What is Economics?. Scarcity and the Factors of Production What is economics? How do economists define scarcity? What are the three factors.
Chapter 1SectionMain Menu Scarcity and the Factors of Production What is economics? How do economists define scarcity? What are the three factors of production?
DEMAND ECON HSE11 MR. PARK ELEANOR ROOSEVELT HIGH SCHOOL.
Chapter 1 What is Economics?. Section 1-1: The Basic Problem in Economics What is economics?  The study of how people satisfy their unlimited wants and.
Economic Choices: Well informed citizens make rational economic choices everyday. The choices we make are based on the fact that we do not have enough.
CHAPTER 1 “ What is Economics ?” What Reichling Economics is NOT! =related
Good Anything that can be grown or manufactured (made) Food Clothes Cars.
Chapter 18 What is economics?
What is Economics? Chapter 18.
Unit 1 Foundations of Economics Chapters 1 and 2
What is Economics? Define Economics and the importance of making choices Define Economics and the importance of making choices Compare Scarcity and shortage.
Splash Screen 2 Section 1-3 In 1901, people discovered oil in Texas— but they were actually looking for water! Disappointed, they offered to trade the.
Economics: Principles in Action
What is Economics? A. What is the Basic Problem in Economics?
What is Economics?. What is Econ? Economics: the study of how individuals, families, businesses, and societies use limited resources to fulfill their.
Section 1 Scarcity and the Factors of Production
Wants, Needs, and Choices
Splash Screen Section 1-1 Guide to Reading Economics is the study of how individuals and societies make choices about ways to use scarce resources to.
Chapter 1 What is Economics?.
The Four Factors of Production (CELL)
Unit 1: Foundations of Economics What comes to your mind when you hear the word SCARCE?
Economic Resources. Economic Systems -nations have different economic systems Four Basic Questions -every nation’s economic system must answer four basic.
Chapter 1SectionMain Menu Scarcity and the Factors of Production What is economics? How do economists define scarcity? What are the three factors of production?
The Fundamental Economic Problem. What is Economics? Economics is the study of how we make decisions in a world where resources are limited. It is sometimes.
Chapter 18.1 The Fundamental Economic Problem. Economic Choices Economics is the study of how we make decisions in a world where resources are limited.
The Basics. My dad gave me one dollar bill ‘Cause I’m his smartest son, And I swapped it for two shiny quarters ‘Cause two is more than one! And then.
Economics – Ch.1, Sec. 1 ⇨ Study of choices that people make to satisfy their needs and wants ⇨ MICRO – Study of single economic actor (individuals, households,
© Mark E. Damon - All Rights Reserved Another Presentation © All rights Reserved
Basic Econ Concepts. What is Economics? Most people aren’t satisfied Constant competition w/ others The problem is that resources are scarce.
Scarcity and the factors of production Economics starts with idea that People cannot have everything they need or want.
CHAPTER ONE WHAT IS ECONOMICS?. EXPLAIN WHY SCARCITY AND CHOICE ARE BASIC ECONOMIC PROBLEMS OBJECTIVE I:
Chapter 1 What is Economics?. Section 1-1: The Basic Problem in Economics What is economics?  The study of how people satisfy their unlimited wants and.
WHAT IS ECONOMICS? Business Economics. What is Economics? Economics - The study of how individuals, families, businesses, and societies use limited resources.
Starter  Get with a group of 3-4 people near you.  Read the “What is economics really about?” handout.  Discuss the handout and decide how you will.
Chapter 1 Economic Decisions and Systems 1.1 Satisfying Needs and Wants 1.2 Economic Choices 1.3 Economic Systems 1.4 Supply and Demand.
Economics 12 Chapter 1 Economics 12 Chapter 1. The examination of the behavior of entire economies: A) Economics B) Microeconomics C) Macroeconomics D)
Chapter 1: What Is Economics? Section I: Scarcity and the Factors of Production Section II: Opportunity Cost Section III: Production Possibilities Curves.
What is Economics? Chapter 1, Section 1. Economics Economics is the study of how people seek to satisfy their needs and wants. Economics is the study.
Splash Screen. Chapter Introduction Section 1:Section 1:The Basic Problem in Economics Section 2:Section 2:Trade-Offs Section 3:Section 3:What Do Economists.
An Economic Way of thinking Economics- the study of the choices people make to satisfy their needs and wants. There are many choices people make and Economists.
Presentation Pro © 2001 by Prentice Hall, Inc. Economics: Principles in Action C H A P T E R 1 What Is Economics?
What is Economics? The social science concerned with how resources are used to satisfy people’s wants. The analysis of how people decide how to resolve.
What is Economics? Chapter 1.
Economics Chapter 1 Section 1.

The Basic Problem in Economics
Economic Principles – chapter 18 _...
The Basic Problem in Economics
Economics is the study of how 
individuals, families, businesses, and 
societies use limited resources to fulfill 
their unlimited wants. The study of.
What is Econ and how does it effect Americans?
Today we’ll begin covering the following topics:
What is Economics? Chapter 1.
The Basic Problem in Economics
Scarcity and the Factors of Production
The Basic Problem in Economics
The Fundamental Economic Problem
The Basic Problem of Economics
What is Economics? Chapter 1.
What is Economics? Chapter 1.
Economics: Principles in Action
The Basic Problem in Economics
Good Anything that can be grown or manufactured (made) Food Clothes Cars.
ECONOMICS The study of how people seek to satisfy their needs and wants by making choices.
Presentation transcript:

Chapter 1

 The basic problem in economics….is what?  How is the economy reported in the news?  How does this affect your life?  Did you know? Pg. 5 predictions… Based on this…what do you think economics is?

scarce resources Economics: the study of how individuals and nations make choices about how to use scarce resources to fulfill their wants.

Resource: anything that people can use to make or obtain what they want.

1. Make a list of all the things you NEED in a week. 2. Make a list of all the things you WANT in a week. 3. You have $100 to live on for a week: make a list of items you would buy. Approximate prices and add them together. Eliminate items if you went over $100. Why did you make the choice to keep or eliminate each item?

Scarcity: means that people do not and cannot have enough income, time, or other resources to satisfy their every desire.

 Not the same as shortage, which is temporary and often exists after disasters where goods and property are destroyed.  Example: Gas Prices change when conditions change providing access to the resource  Scarcity always exists. There are limited amounts of money, time, resources, etc.

 Business’ application – affects decisions about what to produce now, later, and when to stop production. Therefore, affects peoples income and buying power.  Nations’ application – how to spend scarce resources.  Example: social security vs. higher education

 NEEDS:  DEFINATE: Food, clothing, shelter  POSSIBLE: education, job, healthcare  WANTS:  Anything else other than basic needs  WANT = LUXURY  Can be a perceived need

 Land: natural resources – i.e.: land, things found in nature, location of land (determines value)  Labor: work people do – human resources – anyone who works provides this resource  Capital: all the property people use to make other goods and services – i.e. machines used to make autos  NOT the autos, UNLESS they are used as a business i.e. taxi or log trucks, delivery trucks, etc.  Combining capital with land or labor increases the value of all resources by increasing their PRODUCTIVITY: ability to produce greater quantities of goods and services in better & faster ways.

 Entrepreneurship: refers to the ability of individuals to start new businesses, to introduce new products and techniques, and to improve management techniques  Requires initiative and individual willingness to take RISKS.

 Factors of Production: together, the resources of land, labor, capital, and entrepreneurship  Are used to produce goods and services.  Goods : items that people buy  Services: activities done for other for a fee  Technology: use of science to develop new products and new methods for producing and distributing goods and services. Increases productivity!!!

 SCARCITY– Forces choices!  i.e. Education vs. buy a house  What is the resource that is scarce?  LONG TERM VS. SHORT TERM GOALS: Choices change with maturity and life conditions  TRADE-OFF – exchanging one thing for the use of another  i.e. exchange $ for the right to own an iPod  Why are these choice to “trade” made?

When you choose one thing you give up another ALWAYS! i.e. time is a scarce resource. When you choose to spend your time watching T.V. you are giving up that chunk of time for any other purpose (studying, exercising, etc.) Is life a series of trade-offs? How and why???

DEFINITION: the value of the next best alternative that had to be given up for the alternative chosen i.e. national level – tax $: space program or clean polluted river? Making choices that are unavoidable because of the problem of scarcity. i.e. auto pollution vs. increased car manufacturing costs – a choice has to be made.

DEFINITION: all the combinations of goods and services that can be produced from a FIXED AMOUNT OF RESOURCES in a GIVEN PERIOD OF TIME i.e. Guns vs. Butter!! (military spending vs. civilian goods) ** To produce one $ is given up to produce the other. How do you BEST decide what to produce?

 Economy: All the activity in a nation that together affects the production, distribution, and use of goods and services  Economists: gather data to develop theories that are then used to make decisions by businesses or government agencies

 Economic models show the way people react to changes in the economy, usually changes in PRICES!  Three ways to present models: 1. Explanation in words 2. A graph 3. A mathematical equation  Limits 1. A lack of detail 2. Infinite possibilities (things you cannot account for) 3. Shows only basic factors:  i.e. only need to know 3 basic factors to determine buyers reaction to price change: 1) price of item, 2) income of average buyer, 3) price of alternative items

 They only take into account the most important factors, not ALL of them. 1. Creating: a model is considered “good” if it provides useful materials for analyzing the way the real world works through RESEARCH a) Form a hypothesis (idea about the way things should work; educated guess) b) Gather facts c) Draw conclusions 2. Testing: gather and compare data 3. Applying: predicting human behavior – IS THIS POSSIBLE? 1. i.e. cut taxes, increase government spending = people spend more $ = increase of total production 2. Alternative view: view that if taxes are decreased, people may save and therefore no increase in spending.

 1980s – emphasis on business and consumers; reducing unemployment “Reaganomics”  1990s – government intervening to reduce unemployment  Each government era has its own school of thought!  What goes into a government developing its school of thought?

 Values: the beliefs or characteristics that a group or person considers important  Having the same values does not mean that people will agree about solutions!  How would you describe our current government’s school of thought?  What facts do you have to support your hypothesis?