1. What is Economics?

2. The study of how people and countries make decisions about how to use their scarce resources in the most efficient way. It is the study of choices It involves taking measurements, building models and making predictions We can measure economics in different ways: GDP, Unemployment, and CPI

3. Factors of Production You need these basic resources to make goods and have resources Natural Resources: resources found on earth (water, minerals, land, forests) Labor: the work that people do to produce a good or service Capital: machines, buildings, tools, and money Entrepreneurship: Someone who starts a new business or improves an old one Technology: Not just materials but the science and knowledge of technology

4. What is the difference between needs and wants? NeedsWants Something that we need to stay alive Food Water Clothing Shelter Item that is not needed to survive but makes life better New Car TV Music

5. What are goods and services? GoodsServices Items people buy Cars TV’s Bed MP3 players Phones Work done for other people for a fee Teachers Doctors Lawyers Mechanics Store Clerks

6. What is scarcity? A problem in which wants are greater than needs Resources are limited, but wants are unlimited Scarcity is the basic problem of all economics Problem for individuals and businesses We have to make choices because we can’t have it all.

7. What are trade-offs? Resources are scarce and we can’t have it all A trade-off is when you give up one thing for another Every time we make a choice we give up the opportunity to buy or do something else. Ex: Extra $20, if you buy a baseball you then can’t go out to eat with friends. Your choices come at a cost……

8. What is a opportunity cost? When you give up something for something else you are doing at a cost…. An opportunity cost. It is the cost of the best choice, or the choice not taken Ex: Going to college may delay living on your own due to money Ex: Graduating from high school you have a choice, work or school. Which one you give up is the opportunity cost.

9. Wrap-Up Economics is about making choices You need resources to make and have goods. People provide services in your daily life. There are unlimited wants and limited resources. You can’t always get what you want!!!!