1. Introduction to Economics Welcome! 1) Take a Book (front of classroom) 2) Pick a desk carefully, it is for the entire semester!

2. ECONOMICS

3. The World & Resources People +

4. Why do we need Economics? 1)Resources are SCARCE 2)People have Unlimited Wants & Needs FORCES: 3) Society to allocate resources

5. Formal Definition of Economics The social science of how society allocates scarce resources among unlimited wants and needs. End of Day 1 The social sciences are academic disciplines which study the social life of human groups & individuals including economics, geography, history, political science, psychology & sociology

6. Economics is the social science of how a society allocates their scarce resources among unlimited wants and needs. Air versus Oil

7. There is NO Free Lunch Nothing is ever free in Economics People face Trade-offs in all decision making Decisions have : –Opportunity Costs: what you give up –Opportunity Benefits: what you gain –Short Run and Long Run implications

8. Economic Decision Making Opportunity Cost is the value of the next best alternative when you make a decision. Make decisions where the opportunity benefit > opportunity cost You decide to take 5 AP Classes You put little effort into high school

9. Opportunity Cost Worksheet

10. Should I go to college? Opportunity Benefit Opportunity Cost Trade-off Analysis

11. Branches of Economics Microeconomics looks at individual parts of economy: –How households & firms make decisions and interact in specific markets Macroeconomics looks at the entire economy: –Economy-wide phenomena including: inflation, unemployment, interest rates & GDP (economic growth)

12. What is a Millenial? Generation Y born between 1982-2000