1 / 11

Understanding Economics: Making Smart Economic Choices

Economics is the study of how people make choices when faced with limited resources. Two fundamental concepts are scarcity and trade-offs. Scarcity refers to the limited availability of goods and services to satisfy unlimited wants, compelling us to prioritize our needs. Trade-offs involve giving up one option in favor of another. By understanding these principles, we can better navigate the economy and make informed decisions. As resources are always limited, every choice has an opportunity cost, impacting our financial and personal futures.

morton
Télécharger la présentation

Understanding Economics: Making Smart Economic Choices

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. What is Economics? How can we make the best economic choices?

  2. Economics: A Definition • The study of how people make choices when they face a limited supply of resources.

  3. Two basic Economic Ideas • Scarcity: • Definition - limited amounts of goods and services are available to meet unlimited wants. • Forces us all to make choices. • Our wants are greater than our needs. • Forces us to decide what is most important to us.

  4. Two basic Economic Ideas • Trade-Offs: • The alternatives that we give up when we choose one course of action over another. • Giving up one thing for another. • Involved in every decision.

  5. Guided Question: How does scarcity force people to make economic choices? • Decisions are not easy. • There are many, many ways you can spend your money. • When you make a decision, you get something for it, but you also give something up. VS.

  6. NEED • Something essential for survival. • You CAN NOT live without it!!

  7. WANT • Something you desire. • Not necessary for survival.

  8. Wants & Needs = Goods & Services Goods Services Actions or activities that one person performs for another. Work done for someone for a fee. • Physical objects that people, businesses or governments buy. • What people want, but must purchase.

  9. Why are resources limited? Resources Shortage NOT scarcity. Can be renewed or replaced. Example: you want a new, very popular video game, but the stores are out of them. This is a shortage because the game maker can make more. • Anything people use to make things or to do work. • They are limited. • Our wants and needs are always greater than the resources we have to meet them. • People, businesses and governments all have choices to make.

  10. Entrepreneur • A person who decides how to combine resources to create goods and services. • Factors of Production: • Land – all natural resources used to produce goods and services. • Labor – the effort people devote to tasks for which they are paid. • Capital – any human-made resource used to produce goods and services. • Physical Capital – human-made objects used to make goods and services (machinery). • Human Capital – what a worker gains from education and experience (going to college).

  11. Guided Question: How does opportunity cost affect decision making? • Each possible use of the same resource is an opportunity. • Opportunity Cost – the most desirable alternative given up as a result of a decision. • Example: after high school you have many choices: 1. Go to college. 2. Work full time. • If you go to college, you won’t have much money. If you work full time, you will make money immediately, but overall college graduates earn more money than those without a college degree. • There is a cost for giving up one choice or the other opportunity.

More Related