1. Starter
What is economics?

2. Why Study Economics?
Read the following examples of possible newspaper headlines and describe how these headline events could effect you.
War in the Middle East Threatens Oil Supply
Cost of College Education continues to Rise
Government Indicators warn of Possible Recession
New Law Prevents Teens from Working more than Two days a Week
Computer Related Industries experience Great Shortage in Workers
Cost of Health Care continues to Spiral Upward
Unions report that Many Jobs being Lost to Oversees Workers

3. Fundamental Economics

4. Economic Choices
Economics is the study of how we make decisions in a world where resources are limited. It is sometimes called the science of decision making.
Needs are things we need for
survival, such as food,
clothing, & shelter. Wants
are things we would
like to have.

5. Economic Choices (con’t)
The fundamental economic problem is scarcity-we do not have enough resources to produce all the things we would like to have. Because of scarcity, we must make choices among alternatives.
Three Decisions Society must make: What to produce? How to produce? For whom to produce?

6. Using Economic Models
The economy includes all the activity in a nation that together affects the production, distribution, & use of goods & services
Economic Models-representations of the real world, based on economic theories.
1. Business & gov’t often base decisions on the model’s responses to tests.
2. Model’s based on assumptions.
3. Economists use models to predict future of economy.

7. Trade-Offs
Economic choices involve trade-offs, or exchanging one thing for the use of another. (For example, when you by a product, you exchange money for the right to own that product rather that something else you could buy for the same price.)

8. Trade-Off (con’t)
People, businesses, & societies make trade-offs every time they chose to use their resources in one way & not in another. More money for education means less money to spend on medical research or national defense.

9. Needs and Wants Divide a sheet of paper in half-hotdog fold
On one side write Needs. On the other write Wants
On the next slide is a list of products. Place the product in the correct category (need or want)
No discussion! Place according to definition given in class.

10. toothpaste
Soap
Bed
Chewing gum
Wristwatch
Coat
Jeans
Air conditioner
Socks
glasses
MP3 player
Fruit
Television
Haircut
Water
Pedicure
Deodorant
Movies
Computer
Cell phone
Hair spray
Pizza
Microwave oven
Jewelry
vegetables
electricity
Refrigerator
Porsche 911 (car)