ECONOMICS 101 Scott Acker

DEFINING Economics is the social science concerned with the problem of scarcity Economics is the social science concerned with the problem of scarcity Scarcity? Scarcity? Scarcity is when there is not enough resources to meet demand Scarcity is when there is not enough resources to meet demand Unlimited wants vs. Limited Resources Unlimited wants vs. Limited Resources Example: You cant buy 10 packs of gum, if the store only has 8 packs of gum available Example: You cant buy 10 packs of gum, if the store only has 8 packs of gum available

TYPES OF ECONOMICS Macroeconomics- branch of economics that deals with economic theory and the economic decisions of large bodies like the government. Macroeconomics- branch of economics that deals with economic theory and the economic decisions of large bodies like the government. Ex: Countries and their governments, trade between two countries Ex: Countries and their governments, trade between two countries Microeconomics- branch of economics that deals with behavior and decisions of smaller unit like individuals and businesses. Microeconomics- branch of economics that deals with behavior and decisions of smaller unit like individuals and businesses. Ex: families, businesses, domestic economies Ex: families, businesses, domestic economies

ECONOMICS TERMS Opportunity Cost- the true cost of choosing one alternative over the other. Giving up one thing to obtain another Opportunity Cost- the true cost of choosing one alternative over the other. Giving up one thing to obtain another Recession- a significant decline in activity across the economy that lasts longer than three months Recession- a significant decline in activity across the economy that lasts longer than three months Inflation: the rate at which the general level of prices for goods and services is rising and causing the purchasing power to fall. Inflation: the rate at which the general level of prices for goods and services is rising and causing the purchasing power to fall.

DEMAND The demand curve graphically shows how much of a good consumers are willing to buy at different price points The demand curve graphically shows how much of a good consumers are willing to buy at different price points Demand curve shows the relationship between prices and quantity demanded, holding other things constant Demand curve shows the relationship between prices and quantity demanded, holding other things constant

DEMAND GRAPH As you can see on the graph, at lower prices quantity demanded is much greater As you can see on the graph, at lower prices quantity demanded is much greater

SUPPLY CURVE The supply curve shows the amount of a good or service suppliers will be willing and able to sell at a particular time at a particular price, holding other things constant The supply curve shows the amount of a good or service suppliers will be willing and able to sell at a particular time at a particular price, holding other things constant Supply curve is upward sloping because, all else being equal, as the price of a good rises, people are willing to sell a greater quantity of good. Supply curve is upward sloping because, all else being equal, as the price of a good rises, people are willing to sell a greater quantity of good.

SUPPLY CURVE As you can see in the graph, as price increases the willingness to sell increases As you can see in the graph, as price increases the willingness to sell increases

NEXT TIME We will cover what forces cause the inward and outward shift of the demand and supply curve! We will cover what forces cause the inward and outward shift of the demand and supply curve! Here are some helpful sites to look at! Here are some helpful sites to look at! Amos WEB is a great site for introductory economic students Amos WEB is a great site for introductory economic students The site above provides information about a competition for students in high school economics courses. Great study tool for exams! The site above provides information about a competition for students in high school economics courses. Great study tool for exams!