1. Welcome to Economics!

2. Terminology
Economics Factors of Production Microeconomics Labor Macroeconomics Capital Want Entrepreneurs Need Scarcity Goods Services Shortage

3. What is Economics?
The dictionary definition of Economics is that Economics is the study of the production, distribution, and consumption of goods and services.
Let’s make it simple!
The study of how people seek to satisfy their needs and wants by making choices.

4. Micro-Economics
Individual people and individual businesses

5. Macro-Economics
Looks at the economy as the whole

6. Needs
Something you must have to survive. Without a need, you will die.

7. Wants
Something one would like but is not necessary for survival.

8. Remember:
No matter how much money we have, we always want more. More is better!!!
Keeping Up With the Joneses

9. Scarcity Why do we always want more?
Economists believe in a concept called scarcity.
Scarcity is the idea that our resources are limited but our wants and desires are unlimited.
If you had 50 dollars what would you buy? There are so many options but you cannot have everything. You must choose! This is the dilemma that economists look at.

10. Goods
Physical objects one can use/buy/consume

11. Services
Actions or activities one does for another

12. All goods and services we produce are scarce.
REMEMBER
All goods and services we produce are scarce.

13. Shortage
When a good or service is no longer available – shortages occur when producers cannot or will not offer goods and services at the current prices
Don’t confuse scarcity for shortage!

14. Factors of Production
The materials and manpower used to make all goods and services
The three (3) Factors of Production (LLC)
Land
Labor
Capital

15. Land Land refers to all natural resources not created by human labor.
Examples - deserts, forests, mineral deposits, cattle, whales, sunshine, and climate.
How are these limited?

16. Labor Labor is humans with all their efforts, abilities, and skills.
Example - an educated, skilled population
Factors that affect this are: growth, famine, war, and disease.

17. Capital
Capital any human-made resource that is used to produce other goods and or services
Examples - a bulldozer, the factory that built the bulldozer, a cash register in a store.
What are some other examples?

18. Two Types of Capital
Physical Capital – Human made objects used to create or make other goods and services Human Capital – Knowledge and skill a worker gains through education and experience

19. Entrepreneurs
Entrepreneurs are people who decide how to combine land, labor, and capital resources to create new goods and services.
Henry Ford
Bill Gates