1. Economics It may be the most boring topic you will ever discuss, but also the most important.

2. Economics defined u The allocation of limited resources to satisfy unlimited wants.

3. Macroeconomics u The study of the total economy l GNP l Inflation l Unemployment l Recession

4. Microeconomics u Concerned with individual decision making l Budgeting l Lending l Accounting (Record Keeping) l Advertising l Marketing

5. 4 Factors of Production u 1) Labor - physical talents u 2) Land - Natural Resources u 3) Capital - building, equipment, machinery, money u 4) Entrepreneurship - “the brains”

6. Economic Terms that will make our conversations easier in here u 1) Good - “thing” that has value or may be exchanged for a price u 2) Opportunity Cost - The value of the alternative surrendered when a choice is made. u 3) Supply - the amount of a product that producers are willing to sell in the market at various conditionSupply u 4) Demand - the amount of a good that people are actually willing and able to buy given the prices and choices available.Demand

9. Law of Supply u The Law of Supply states that when the price of a product is lowered, with no change in other factors, less of the product will be supplied. l Factors that affect Supply?

10. Law of Demand u The Law of Demand states that when the price of a product is increased with no change in other factors, less product will be purchased. l Factors that affect demand? u Size of population affects demand. u Tastes and preferences of consumers affects demand. u Income and distribution of wealth affects demand. u Relative prices of all goods and services affect demand.

11. Relationship between supply and demand u A. Price is found at equilibrium, where the supply and demand curves intersect.equilibrium u B. If demand curve shifts right, the price increases. u C. If supply curve shifts left, the price increases.

13. Relationship between enterprises u Supplementary enterprises are those where one enterprise supplements the income of another. l 1. A sports stadium is often used for concerts. l 2. A lawn tractor can be used to move snow. l 3. Making a corn maze.

14. Relationship between enterprises u Complementary enterprises are those where one enterprise produces the inputs for another. l 1. Soybeans used in rotation to leave nitrogen for corn. l 2. Tree trimming service may sell mulch.

15. Relationship between enterprises u Competitive enterprises are those where one enterprise interferes with another. l 1. Enterprises competing for labor resources. l 2. Students who work so much that they do not have enough time to study. l 3. Corn and Soybeans