Intro to Economics

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Intro to Economics

• The Concepts

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Economics

• The study of how we make decisions in a world
  where resources are limited (the science of
  decision making)

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Scarcity

• The inability to satisfy all needs (necessary for
  survival) and wants (things we would like to
  have) at the same time.
• All resources and goods are limited.
• This requires that choices be made.

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Resources

• Factors of production that are used in the
  producing of goods and services
• Types are
• Natural
• Human
• Capital
• Entrepreneurship

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Choice

• Selecting an item or action from a set of
  possible alternatives.
• A person must choose/make decisions about desired
  goods and services because they are limited.

6
Opportunity Cost

• What is given up when a choice is made
• A person must consider the value of what is given
  up when making a choice.

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Price

• The amount of money exchanged for a good or
  service
• Interaction of supply and demand determines price
• Price determines who acquires the good or service

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Incentives

• Things that incite or motivate
• They are used to change economic behavior

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Supply and Demand

• The interaction between supply and demand
  determine price
• Demand is the amount of a good or service that
  consumers are willing and able to buy at a
  certain price.
• Supply is the amount of a good or service that
  producers are willing and able to sell at a
  certain price.

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Production

• The combining of human, natural, capital, and
  entrepreneurship resources to make goods or
  provide services.
• Resources available and consumer preferences
  determine what is produced.

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Consumption

• Using goods and services
• Consumer preferences and price determine what is
  purchased.

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Entrepreneur

• A person who takes a risk to produce goods and
  services in search of profit
• May establish a business according to any of the
  three types of organizational structures
  (proprietorship, partnership, corporation)

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Thats the End of this Segment

• Stay tuned for more on Economics!
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