CHAPTER 1: WHAT IS ECONOMICS

SERVICE: Professionals (Intangible) Goods vs. service GOODS: Tangible SERVICE: Professionals (Intangible)

Consumer vs. Producers YOU!! Businesses!!

WHAT IS A MARKET?

WHAT IS VOLUNTARY EXCHANGE?

FACTORS OF PRODUCTION NATURAL RESOURCES HUMAN RESOURCES CAPITAL RESOURCES ENTREPRENEURS

SCARCITY EVERYTHING IS SCARCE!!

OR OPPORTUNITY COSTS WHAT ARE YOU WILLING TO GIVE UP? WHAT ARE YOU MISSING OUT ON? OR

TRADE-OFF LET’S MAKE A DEAL! I WANT EVERYTHING! AND

MARGINAL COSTS AND BENEFITS MARGINAL=ADDITIONAL LET’S GET A JOB IN MADISON—GAS $4.09 LET’S GET A JOB IN BRANDON—GAS $4.09

PROFIT: HOW DO YOU GET IT? TOTAL REVENUE – TOTAL COST = PROFIT HOW MUCH MINUS HOW MUCH YOU MAKE YOU SPEND

QUESTIONS, WHAT QUESTIONS?? THREE KEY ECONOMIC QUESTIONS: HOW WE RUN OUR ECONOMY! WHAT, HOW, WHO?? WHAT GOODS/SERVICES SHOULD WE PRODUCE? HOW ARE WE GOING TO PRODUCE GOODS/SERVICES? WHO WILL CONSUME THESE GOODS/SERVICES

TYPES OF ECONOMICS MICROECONOMICS: SINGLE INDIVIDUALS HOW MUCH WILL YOU PAY FOR A TICKET? DO WE TAKE A VACATION THIS YEAR? SHOULD WE BUY A NEW IPAD? MACROECONOMICS: ECONOMY AS A WHOLE “BIG PICTURE” WHAT ARE TICKETS GOING FOR TODAY? HOW MANY ARE UNEMPLOYED? HOW HAS THE NATION’S TOTAL INCOME CHANGED?