1. Intro to Economics
Unit 1
All the Fundamental Things You Need to Know

2. TINSTAAFL THERE’S NO SUCH THING AS A FREE LUNCH! Everything has a cost
Time, money, etc.

3. Three Fundamental Questions of Economics
WHAT to produce
HOW to produce
FOR WHOM to produce

4. Three Basic Human Needs
Food/Water
Clothing
Shelter
Sorry kitty, X-Box is not a basic human need.

5. Need vs. Want Need: basic requirement for survival
ex) food, clothing, shelter
Want: way of expressing a need
ex) wanting a Chipotle burrito to satisfy need for nourishment

6. It’s Safe to Assume This:
People have UNLIMITED WANTS

7. It’s Safe to Assume This:
We have limited resources.

8. Resources: Factors of Production
Land
Labor
Capital
Entrepreneurship
Technology

9. Land
Natural resources
Ex) Trees, water, minerals, land, etc.

10. Labor
The people who work to produce goods and services
Labor force

11. Capital
Goods, tools, and machines required for production

12. Entrepreneurship
Economic motivation for someone to try to make a profit from an idea

13. Technology
Knowledge, science, inventions, technology that can inform or improve production

14. The Biggest Challenge of Economics: Scarcity
We do not have enough resources, time, money, etc. to get everything we want.
We have to make choices on how to allocate resources.

15. Allocation How are we going to use our scarce resources?
Determine what needs or wants should be addressed
Determine what/how many factors of production to use to address these needs or wants

16. So What Exactly is Economics?
The study of how people and nations make choices about how to use scarce resources to fit their needs and wants.

17. Basic Economic Concepts

18. Goods
Consumer Good: intended for final use by individuals

19. Goods
Capital Goods: manufactured goods used to produce other goods and services

20. Services
Service: work that is performed for someone

21. Value & Paradox of Value
Value: monetary worth ($)
Paradox of Value: when some necessities, such as water, have little monetary value, whereas non-necessities, such as diamonds, have higher value

22. Utility Utility: Capacity to be useful or provide satisfaction
Value = scarce + has utility

23. Wealth
Wealth: accumulation of products that are tangible, scarce, useful, and transferable from one person to another