Introduction to Economics Johnstown High School Mr. Cox What is Economics?

Bellringer: answer the following in your notebook. 1. Draw an image of the term Eternity…. 2. Draw an image of the opposite of Eternity…. 3. Can eternity be measured??? e·ter·ni·ty (-tûrn-t)n. a) Time without beginning or end; infinite time. b) The state or quality of being eternal. oThe timeless state following death. oThe afterlife; immortality. c) A very long or seemingly endless time. 4. Can all tangible things on the Earth be measured? 5. If they can be measured, would it be safe to say that there are limitations to how much anyone can have of anything? What limitations are placed on Bill Gates, or Barack Obama?  Doesn’t Bill Gates have to make choices on where to put his money? Why or why not?

What is Economics? Cox’s Definition Economics – the study of choices Choices are indicators of economic activity The limitation or lack of infinite amount of any particular “thing,” specifically things that people want, requires that we make choices. Throw a piece of paper in any direction, and what you hit will more than likely require a choice to be made or has been made….. What other fields of study deal with choices? Psychiatry, Sociology, History, etc… Within the context of my definition of Economics, respond to the following quote…. “We need to teach the next generation of children from day one that they are responsible for their lives. Mankind's greatest gift, also its greatest curse, is that we have free choice.” -Psychiatrist Elisabeth Kubler-Ross Standard Definition Economics – the study of the use of scarce resources that have alternative uses 1. That limitation of everything (or resources) is defined as “SCARCITY” 2. The possible choices are defined as “ALTERNATIVE USES” 3. Today’s Economy is very interdependent, both locally and globally

Alternative Use of Resources All resources have different uses or alternative uses. Give 5 examples of resources you have.

Economics Definition(s) “The study of the use of scarce resources which have alternative uses.” Scarce or Scarcity What everybody wants adds up to more than there is. “Just as soon as people make enough money to live comfortably, they want to live extravagantly.” There has never been enough to satisfy everyone completely. Scarcity requires productive efforts and personal responsibility.

“There is no such thing as a free lunch…” Trade – offs – all the alternatives that we give up whenever we choose one course of action over another. Opportunity Costs – the most desirable alternative given up as a result of a decision. “Life does not ask us what we want, it just presents us with options.”

Efficiency Efficient uses of given resources is the heart of Economics Prosperity v. Poverty 1. Determined by efficiency of resource use, locally or nationally. 2. Rich Resources = Poor Nation Lack of Economic Mechanisms and specific skills for efficient abundant output (ex. Brazil, Russia) 3. Poor Resources = Wealthy Nation People and economy are well adapted for allocating and using resources had or purchased (ex. Japan, Switzerland)

Key Terms Economics – the study of the use of scarce resources which have alternative uses. Scarcity – what everybody wants adds up to more than there is. Alternative Uses  Efficient uses of given resources is the heart of Economics