1. Economic Terms

2. There are some basic economic terms that we need to be aware of before we can learn about the economy.

3. Wants
Things we desire to have

4. Goods
Physical products

5. Services
Products you can’t touch

6. Scarcity The result of an inability to satisfy all of everyone’s wants
EVERYTHING IS SCARCE

7. Choices We can’t have everything we want
Therefore, we must choose what we get

8. Opportunity Costs
The best alternative given up when making a decision

9. Rationing Device
A means for deciding who gets what portion of the available goods and services

10. Economics
Studies the choices of people trying to satisfy their wants in a world of scarcity

11. Exchanging
Giving one thing for another (e.g. $ for food)

12. Market
Whenever and wherever people voluntarily make exchanges with one another

13. Economic Concepts

14. These concepts are the basis for our study of the economy

15. Trade-offs
Giving up some of one thing in order to get more of another

16. Unintended Effects
Taking action to solve one problem results in something unrelated to occur.
Example: raising the price on a pair of shoes to earn more money and ending up selling fewer shoes and actually losing money

17. Global Economy
Economic actions taken anywhere in the world may affect an individual’s standard of living

18. Microeconomics
Studies the individual or a single business in the economy

19. Macroeconomics
Studies the economy as a whole

20. Factors of Production Natural resources Human resources Capital
Entrepeneurship

21. Economic Questions What goods will be produced?
How will the goods be produced?
For whom will the goods be produced?