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Introduction to Economics and Scarcity
By Ben Quick
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What is Economics $the study of how individuals and nations make choices about how to use scarce resources to fulfill their wants and needs. $Keys to understanding Economics: Know the meaning of choices(decisions), scarcity, and resource.
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Choice $ In Economics, Choices are the decisions we (people, business, governments) have to make concerning the resources we have.
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Resources $ Anything that people can use to make or obtain what they want. $ Includes: money, skill, knowledge, time, etc..
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Scarcity $ The universal problem that faces all societies because there are not enough resources to produce everything we want and need. $ Scarcity requires people to make choices about the goods and services they use $ Unlimited want v/s Limited resources
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Unlimited Wants $ There are three reasons why wants and needs are virtually unlimited: - Goods eventually wear out and need to be replaced - New or improved products become available - People get fed up with what they already own
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Limited Resources $ All resources are limited. $ Examples: - Oil
- Time _ Money - Fresh water
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Four Themes of Economics
Scarcity – Why can’t I have everything I want? Profit Motive – What different incentives do you respond to? Voluntary Exchange – Why should I trade? Economic Interdependence – How do your choices affect others?
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Allocation Strategies
Allocate means to distribute according to a plan Lottery First come Seniority Authority Price Contest Force Majority rule Personal characteristics
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Questions?
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