What is Economics

 Main Idea: Scarce resources affect everyone and economists simplify the world to help us understand it.

 Economics  Scarcity  Factors of production  Land  Labor  Goods  Services  Capital  Productivity  Entrepreneurship  technology

 How does what we want differ from what we need?  Give an example:  How does this affect choices we make as consumers?  How does scarcity affect us all?

 List and give a short description of the 4 factors of production a. b. c. d.

Main Idea: The effects of our economical choices are long lasting

 Trade-off  Opportunity cost  Production possibilities curve

 How can we relate trade offs and opportunity costs?  How can we show society’s trade off in a production possibilities curve?

Main Idea: Economists are social scientists who study the ways individuals and nations use their resources.

 Microeconomics  Macroeconomics  Economy  Economic model  hypothesis

 How do economists use models (charts and graphs) to study the real world?  Why do you think there are different types of economic thought?

Main Idea: We have many choices as consumers. Our choices make our economy different from other countries.

 Economic system  Traditional economy  Command economy  Market economy  Market  Circular flow of economic activity  Mixed economy

 What are the 3 questions that all economic systems must answer? a. b. c.

 What are the differences of the main economic systems? System: SimilaritiesDifferences

Main Idea: The American System is an economy based on a free market. A Seller can choose to make a product or not. A consumer can choose which products they want to buy.

 Capitalism  Laissez-faire  Free enterprise system  Profit  Profit incentive  Private property  competition

 What is the role of government in our free enterprise system?  How do freedom of enterprise and freedom of choice apply to the American Economy?  What roles do the following play in American Economy? A. Private property B. Profit incentive C. Competition

Main Idea: The US’ goals are evident in the Constitution, government policies, and actions of its people.

 Economic efficiency  Economic equity  Standard of living  Economic growth

 List and give a brief description of the major goals of a market economy:  A  B  C  D  E  F  G

 How can Americans balance economic rights with economic responsibilities?