1 / 5

Chapter 1 What is Economics?

Chapter 1 What is Economics?. Section 2 Trade-Offs and Opportunity Costs. Trade-Offs and Opportunity Costs. Isn’t this the meaning and s cope of economics???. Trade-Offs and Opportunity Costs. Opportunity Cost. Because resources are scarce, people can’t have everything they want.

stu
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 1What is Economics? Section 2 Trade-Offs and Opportunity Costs

  2. Trade-Offs and Opportunity Costs Isn’t this the meaning and scope of economics???

  3. Trade-Offs and Opportunity Costs Opportunity Cost Because resources are scarce, people can’t have everything they want. Therefore, they face trade-offs (alternative choices about spending their time or income) Each trade-off had advantages and disadvantages How do you decide? A decision making grid! Economists view cost as an opportunity cost (Choosing the next best thing or alternative when considering the use of money, time, or resources). http://www.youtube.com/watch?v=q1n4yiPPKSw Trade-Offs Among Alternatives

  4. Trade-Offs and Opportunity Costs • To determine what will be gained or lost in your personal life, a business, or in a economy, economist implement a production possibilities frontier (a diagram of goods and services , two at a time, that an economy can produce at full-strength). • Look at pg. 16 in your books at The Production Possibilities Frontier (PPF). • Some things to think about: • On the graph labeled “A” what could make the quantity of guns rise and the butter to stay the same? • On the graph labeled “B”, what does it mean when the caption reads, “When all resources are not fully used, a country cannot reach its potential.”? • What are some hypothetical possibilities on why the production of butter went down 200 units, but the gun manufacturer did not suffer any lack in production. • How does our nation’s drop-out rate affect the PPF?

  5. Production Possibilities Frontier Each Unit x 10,000 60 50 40 Guns - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 30 20 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 10 0 0 10 30 50 40 20 60 70 Butter

More Related