1. WHAT IS ECONOMICS?

2. What is Economics?  Goods and Services are tangible and intangible things that satisfy people’s wants and desires.  Goods: Cars, Computers, Ipods, Fruit, Cell phones  Services: Doctor, Teacher, Accountant, Librarian SO… What are the wants and desires of all individuals?

3. What is Economics? WE WANT EVERYTHING!

4. What is Economics? OUR WANTS ARE UNLIMITED!!

5. What is Economics?  We want; food, water, good grades, a haircut, money, a car, a home, pictures, furniture, groceries, relationships, happiness, we want, we want, we want… the list is endless  What is the definition of Economics?  “Economics is the study o f how individuals and society, experiencing virtually limitless wants, chooses to allocate its scarce resources to satisfy those wants.”

6. What is Economics?  So what dilemma does this create?  We have unlimited wants, and scarce resources.  What causes this dilemma?  Scarcity- the idea that our unlimited wants out weigh the resources available which makes all levels of society make decisions.

7. What is Economics?  What is scarce?  Everything is scarce because our wants ALWAYS exceed the limited resources available.  Simply put… Economics is:  Economics=Scarcity And the definition of Scarcity is  Scarcity = wants > availability of resources

8. What is Economics?  When decisions are made there is always a cost involved.  Opportunity Cost= the value of what you must give up when you make a particular choice.  Example: Going to college, what are you giving up?

9. What is Economics?  Four Categories of Scarce resources: 1. Land Raw Materials, Natural Resources, Air, Water 2. Labor (Human Capital) Human knowledge, Skills, Workers willing and able to perform a job 3. Physical Capital Machines, Factories, Equipment 4. Entrepreneurship Someone willing to take a risk and start a business

10. What is Economics?  What are we studying specifically in Macroeconomics?  How societies make decisions from limited resources to meet their societal goals and answer the 3 key economic questions: 1. What to produce? 2. How to produce it? 3. Who is going to consume the good/How is it allocated? Societal Goals- Efficiency, Growth, Security, Equality, Freedom

11. What is Economics?  4 Economic Systems: 1. Traditional 2. Centrally Planned 3. Free Market 4. Mixed/Modern