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What is Economics?

What is Economics?. Chapter 26 Section 1. Economics. Is the study of how individuals and nations make choices about how to use scarce resources to fulfill their needs and wants. Resource s. Is anything that people can use to make or obtain what they want. Scarce.

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What is Economics?

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  1. What is Economics? Chapter 26 Section 1

  2. Economics Is the study of how individuals and nations make choices about how to use scarce resources to fulfill their needs and wants.

  3. Resources • Is anything that people can use to make or obtain what they want.

  4. Scarce • Everything that exists is limited. There is never enough of any resource to meet all needs and wants. • Except for… • No not really everything is limited.

  5. Scarcity Vs. Shortage • Scarcity • Always exists because everything is limited • Shortage • Is always temporary. Shortages often exist after major hurricanes or floods that destroy goods.

  6. Spot QuizScarcity Vs. Shortage • Scarcity Poverty Hurricane • Shortage

  7. Needs Vs. Wants • Needs • Are the things you have to have to survive: Oxygen, Food, Water, Shelter…Clothes? • Wants • Everything other than basic needs.

  8. Goods and Services • Goods • The items that people buy, that can be owned. • Services • The activities done for others for a fee.

  9. Spot QuizGoods and Services • Services CD Concert • Goods

  10. The Types of ResourcesAKA: Factors of Production • Land: • This term refers to natural resources not just to surface land. This includes: Oil, Timber, Minerals… • Labor: • Any person that works, this is also called Human Resources.

  11. The Types of ResourcesAKA: Factors of Production • Capital: • All the PROPERTYpeople use to make other goods and services. • Entrepreneurship: (AHN-Truh-Pruh-NUHR-ship) • The ability of individuals to start new businesses, to introduce new products and techniques, and to improve management techniques.

  12. The Types of ResourcesAKA: Factors of Production • Technology: • Any use of land, labor, and capital that produces goods and services more efficiently. This increases PRODUCTIVITY. • Productivity: • The ability to produce greater quantities of goods and services in better and faster ways.

  13. Trade-Offs • A trade-off is exchanging one thing for another. • If you choose to buy a music CD, you are exchanging your money for the right to own the Music CD. • Every trade-off involves a cost in making a choice.

  14. OR

  15. Production Possibilities • All the combinations of goods and services that can be produced from a fixedamount of resources in agivenperiod of time.

  16. Opportunity Cost • The value of the next best alternative that had to be given up for the alternative that was chosen. OR

  17. Partner Questions!Find your “Macro Economics” partner and answer the following questions • Label your paper and write the questions and the answers you discuss on separate sheet of paper. • List and describe an example of 2 of the 4 factors of production for any store you both have bought something at. • Provide an example of Economics as it relates to an individual and as it relates to a Nation-state.

  18. What is Economics? Chapter 26 Section 1

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