1. Economics Key Terms Economics need want law of scarcity producer consumer factors of production supply demand law of supply law of demand price equilibrium point surplus shortage Economic interdependence

2. What is Economics? What is the Law of Scarcity?

3. Economics The Social Science that deals with making choices about how we use our resources, including money and time.

4. Law of Scarcity All resources are limited

5. Opportunity Cost In order to get something you always have to give up something else.

6. Economics 3 economic questions 1.What should be produced? Cars vs. Buses & Trains Space exploration vs. farming technology

7. Economics 2.For whom should we produce? Wealthy/Rulers Consumers Poor/equal distribution

8. Economics 3.How should we produce? Machine Human Power

9. 4 Factors of Production Land Labor Capital Management

10. Supply The amount of a good or service for sale at a given time

11. 2 Main Types of Economies Government Interference Less More Capitalism (Free Market) Communism (Command Economy)

12. Government Interference in free market How: Taxes, Tariff, Price Ceiling, Price floor Why: Protection American Products the environment Innovation/Technology People

13. Law of Supply As prices go up, producers are willing to produce more, as prices go down, the produce less

14. Demand The ability and willingness of people to buy something.

15. Law of Demand As prices go up, people demand less. As prices go down, people demand more.

16. Supply and Demand