Economics

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Economics

• What is it and how does it affect me?

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Why study economics?

• Because you cant have everything you want!
• Problem of SCARCITY
• Definition The condition that occurs because
  society does not have the resources to produce
  all the items people would like to possess.
• To become better, informed decision makers.

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Divisions of economics

• Microeconomics
• Study of choices made by individual economic
  actors.

• Macroeconomics
• Study of the behavior and choices of
• entire
• economies.

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Economics

• A study of mans efforts to satisfy unlimited and
  competing wants using limited resources.
• A study of what is produced, and who gets how
  much.

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The Study of Choices

• Individual Choices
• Group Choices
• Choices regarding resources
• Choices dealing with time

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3 Basic Questions

• What to produce?
• How to produce?
• For whom to produce?

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Who decides?

• Consumers those buying or obtaining the
  resources
• Producers those who make things to satisfy
  needs and wants

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Deciding on what?

• Resources anything that people use to make or
  obtain what they need or want
• Goods objects that can be purchased
• Services actions or activities performed for a
  fee

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Factors of Production

• Land-natural resources
• Capital
• Capital goods-tools, equipment, and factories
  used to produce goods and services.
• Financial capital- money used to buy the tools
  and equipment used in production

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Factors of Production

• Labor-people using their efforts, abilities and
  skills.
• Entrepreneurs- a risk-taker in search of profit.