1. Introduction to Economics
Chapter 18

2. Quiz 18
____ is the study of how people satisfy unlimited wants & needs with limited resources.
____ is basic problem of economics.
List the 3 basic economic questions: (3-5)
6. Rent is an example of a ___ cost in a business.
7. T/F Economic models are always reliable.
8. T/F Some trade-offs have no opportunity costs.
9. T/F All people have their basic needs met.
10. T/F Most teenagers satisfy wants with their money.

3. What is Economics?
The study of how people satisfy unlimited wants and needs with limited resources.
Why is “decision science” a good name for economics?
Why can’t we have it all????
Does everyone make choices?
Why?
SCARCITY: Lack of a resource

4. Goods versus Services Goods are tangible items sold for a fee EXAMPLES
Services are work performed for a fee
EXAMPLES

5. The 3 Basic Economic Questions
What to produce? (What to make?)
Availability
Profitability
How to produce? (How to make g/s?)
Efficiency
Better, cheaper, faster
For whom to produce? (Who gets g/s?)
Deserving
Affordability

6. Revenue & Costs What are fixed costs? Examples?
What are variable costs? Examples?
TOGETHER, these equal the total costs.
What are marginal costs? Example?
What is revenue? Give examples.
Why do businesses fail?

7. “You can’t always get what you want”
What is a trade-off? Give an example.
What is an opportunity cost? Give the answer from the above example.
How do opportunity costs play out in the real world?
How do budgets affect trade-offs and their resulting opportunity costs?
Do activity, discuss and award prizes.

8. How to make good decisions?
Cost-Benefit analysis
Do example.
Read 19.1 and complete chart and questions.