1. E CONOMICS

2. W HAT IS E CONOMICS ? Economics is the study of how society uses it’s recourses to satisfy it’s wants and needs.

3. N OW I MAGINE T HIS … First a house hold works together to do chores. They cut fire wood to keep themselves warm. They go to the store and but food. They cook meals. They take the family pet to the vet.

4. A ND T HIS … The managers of a large firm are deciding to produce a new product for line of electronics. They are making decisions on their pest place to put their advertising dollars other then in TV commercials or online.

5. A ND F INALLY T HIS … Law makers in Washington D.C. are deciding how to spend federal money. Should they spend money on preschool programs for minority children? Should they invest in a new military weapon system that could make the country safer? How much money should the government spend on health care? What controls should be placed on the internet?

6. W HY N OT F OUND A LL OF T HESE ? We would if we could but we cannot.

7. T HE REASONS WE CAN ’ T HAVE EVERYTHING … Scarcity- All resources are limited and therefore are scarce. Everyone cannot have everything they want. There is not enough stuff to go around. To Decide how funds get allocated we need to look at our wants and our needs. Needs- Are our basic needs to survive like food clothes and shelter. Wants- This basically is limitless other then the needs we have.

8. T HINGS TO H ELP OUR W ANTS AND N EEDS … Land- this is all natural resources used to produce goods and services. Goods and Services are the things that we buy like iPods and haircuts. A good is something you can hold. A service is something that gets used up right after it is purchased. Labor- This is and effort that an individual person puts into making a good or service. Capital- This is anything that is used to produce other goods and services. If you make cars you need machines to make the metal that is used in the cars. It is also the truck that drives the cars to the dealer who sells them and it is the building that the cars are made in.

9. W HY D O W E S TUDY E CONOMICS ?

10. T HE A NSWER IS … We really want to be good consumers since we have limited recourses. A Consumer is a person in an economy that purchases goods. Citizens are people in a country.