1. Introduction to Economics
What is Economics?
Introduction to Economics

2. The Definition of Economics
The study of how people’s needs and wants are provided
What is a want?
A want is everything people desire beyond basic goods and services that they need.
Wants are unlimited
Needs are unlimited
Production- changing resources into goods that satisfy needs and wants of people and businesses
Profit- money left after all costs of production have been paid (wages, rent, taxes and interest)

3. What are some examples of needs and wants?
Food
Water
Shelter
Clothing
Wants
New car
Computer
Movie tickets
New Ipod/MP3

4. 4 Reasons why wants and needs are virtually unlimited
Goods wear out and need to be replaced
New or better products become available
People get fed up with what they already own
An increase in salary causes the expectations of the consumer to rise

5. What are resources?
Anything that people can use to make or obtain what they need or want
Four factors of production:
Land- natural resources such as land, forests, oil and water
Labor- the work that people do
Capital- money, tools, machinery, factories
Entrepreneurship- ability of people to start their own new business

6. What are the three questions about resources?
Scarcity- A state in which people do not and cannot have enough income, time or other resource to satisfy their every desire
Economic Problem
The basic problem is that there are limited resources for infinite human wants (reflects scarcity)

7. 3 Basic Economic Questions
What shall be produced?
How shall goods be produced?
For whom shall goods be produced?

8. Intro. To Supply and Demand
Supply- amount of a product offered for sale
Demand- amount of a product consumers want to buy
If demand for an item goes up, prices rise
If supply for an item goes up, prices go down