Economics 101

When you think of the word

Economics what comes to mind?

Do Now:

The study of how people and nations make choices about how to use scarce resources to fulfill their needs and wants…

What is Economics?

Needs Versus Wants

Needs versus Wants

Needs Wants

Survival1. Shelter2. Food3. Water4. Healthcare5. Education

Everything you desire but may never get

Everything else that isn’t a basic need

Good versus ServiceGood Service

Object, something you buy

Something done for you for a fee

ResourcesResources Human Resources

What you use to make your needs and wants

Natural Resources- Land, Water

Resources are always scarce!!!

Workers

Factors of Production:Land Labor

The natural resources The land you use for

your business or what land your building is on

Workers

Factors of Production:Entrepreneurship Capital

Someone who has an original idea

All the things you need for your business

Financial Capital: money to run your business

Factors of Production

Technology

The science or process behind producing the goods or services

Also known as “Knowledge”

Examples:Vamsi’s Car Repair Shop Land:

Labor:

Capital:

Entrepreneurship:

Technology:

Examples:

Parteek’s Pizza Shop

Land:

Labor:

Capital:

Entrepreneurship:

Technology:

Scarcity versus ShortageScarcity Shortage

Once it is gone it may never come back

You may not have it right now but it will come back

Temporary

Because we have limited resources we have to make choices

We can’t fulfill everyone’s needs and wants

What does this matter?

Choices:

Trade Off Opportunity Cost

The next best thing What you gave up

The “cost” or value of what you gave up

Not always a monetary value

Choice: Tradeoff: Opportunity Cost:

Examples:

Choices in Production:Production Production Possibilities

Making goods and services

Manufacturing

All the possibilities you can make from your resources

Examples:Kush’s Pig Farm

Production Possibilities:

Form of Production:

Rahi’s 100 Acres of Land

ProductionPossibilities:

Form of Production: