What is Economics?

Have you ever wondered why: Gas Prices Spike Food Costs Rise U.S. Politicians worry when other countries talk about going bankrupt You can’t get a good interest rate on your savings account

Economics The study of the production & consumption of goods and the transfer of wealth to produce and obtain those goods Economics explains how people interact within markets to get what they want or accomplish certain goals

2 Types of Economics Microeconomics Focuses on the actions of individuals & industries, like the dynamics between buyers & sellers, borrowers & lenders Macroeconomics Broader view by analyzing the economic activity of an entire country or the international marketplace

Scarcity A Shortage There is Scarcity because of society’s unlimited wants exceed the economy’s ability to meet these wants

The Law of Scarcity Wants Different luxury car for each day of the week 10-bedroom mansion 4 oz. of Russian Caviar 20-carat diamond ring Full Household staff Private Jet List only limited to: Time Imagination Appetite Economy could not produce enough goods & services to meet all wants Not enough: Land Adult population Skilled workers to build Not enough food

The Law of Scarcity The imbalance between wants & ability to meet those wants Says there will never be enough to meet everyone’s wants

Economic Systems The set of arrangements that a society uses to allocate scarce goods Capitalism Economic system that that the factors of production are privately owned & resource allocation decisions are made by private markets Socialism Economic system that land & capital are owned by the state & the use of these resources is determined by the state

Current Event Research a topic for a current event that is taking place anywhere in the world Topics include: Scarcity Economic Systems Capitalism Socialism Macroeconomics