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Introduction to Economics and Scarcity

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1 Introduction to Economics and Scarcity
By Ben Quick

2 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.

3 Choice $ In Economics, Choices are the decisions we (people, business, governments) have to make concerning the resources we have.

4 Resources $ Anything that people can use to make or obtain what they want. $ Includes: money, skill, knowledge, time, etc..

5 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

6 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

7 Limited Resources $ All resources are limited. $ Examples: - Oil
- Time _ Money - Fresh water

8 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?

9 Allocation Strategies
Allocate means to distribute according to a plan Lottery First come Seniority Authority Price Contest Force Majority rule Personal characteristics

10 Questions?


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