1 / 27

Chapter 1: What is Economics?

Chapter 1: What is Economics?. Section 1: Scarcity and Factors of Production. What is Economics?. What is Economics?. The study of scarcity and choices Scarcity- limited resources for unlimited wants. “There is no such thing as a free lunch”. Choices.

karl
Télécharger la présentation

Chapter 1: What is Economics?

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Chapter 1: What is Economics?

  2. Section 1: Scarcity and Factors of Production

  3. What is Economics?

  4. What is Economics? • The study of scarcity and choices • Scarcity- limited resources for unlimited wants “There is no such thing as a free lunch”

  5. Choices • People need to decide how to use limited resources • Need: necessary for survival • Want: desirable but not essential

  6. Goods and Services • Goods: physical objects that are produced • Services: actions performed

  7. Factors of Production • Land • Labor • Capital (Physical & Human)

  8. Land • Natural resources used to produce goods. • Oil, Trees, Iron-Ore

  9. Labor • Effort of people to create a product. • Manufacturers, managers, engineers, etc.

  10. Capital • Human made resources used to produce other goods. • Physical Capital • Human Capital

  11. Physical Capital • Human-made goods used to produce other goods.

  12. Human Capital • Skills and knowledge of a worker acquired through education and experience.

  13. Entrepreneurship: The 4th Factor of Production • Entrepreneur: someone who combines land, labor, and capital to creates and services

  14. In groups… • Choose an object • What was necessary for its creation? • Land? • Labor? • Capital (Physical and Human)? • Report back to class

  15. Section 2: Opportunity Cost • Because of scarcity: we need to make decisions about how to manage resources.

  16. Economics: Science of Decision Making • Trade-offs are alternatives given up when making a decision

  17. Guns or Butter? • Countries need to decide how they will use their resources • If a country chooses to produce more military goods (“guns”) they will have less consumer goods (“butter”)

  18. Opportunity Cost • Opportunity cost is the most desirable alternative given up in a decision.

  19. Thinking at the Margin • Black and White decisions in economies are rare, thinking at the margin considers compromises and multiple scenarios.

  20. Decisions at the Margin

  21. Decisions at the Margin

  22. Section 3: Production Possibilities Curves Production possibilities curves plot decision making on a graph, or curve

  23. Production Possibilities Curve

  24. Frontier The Frontier represents maximum efficiency: the full production capability of the economy

  25. Underutilization • Underutilization: economy is not producing at capability • WHY?

  26. Future Production Possibilities Curve • Sometimes the entire curve shifts outward • WHY?

  27. Examples of trade-offs: Soviet Union • The former Soviet Union prioritized military development at the expense of consumer goods and development.

More Related