Embed Size (px)
DESCRIPTION
Economicsacademic disciplinemost discussed Economics is the academic discipline most discussed by the general public. least understood[“Language of graphs”] It is also one of the least understood. [“Language of graphs”] The economist’s lab is the real world. They don’t conduct controlled laboratory experiments. They are predicting human behavior. Physicists explore the physical world. Economics as a social science looks Physicists explore the physical world. Economics as a social science looks at the behavior of people in the marketplace. at the behavior of people in the marketplace. Economics is not an “exact science” but it gives “likely results”.
Citation preview
PAHSPAHSChapter 1 & 2Chapter 1 & 2
EconomicsEconomics
Uncle Sam wants you toUncle Sam wants you todo better in economics.do better in economics.
““No horn of plentyNo horn of plenty””
ScarcityScarcity ChoicesChoices
What is given upWhat is given up
ECONOMICSECONOMICS
Unlimited NeedsUnlimited Needsand and WantsWantsDemandDemand
In other wordsIn other words““THISTHIS isis notnot the casethe case””..
ChoiceChoicess
LLimited imited RResourcesesourcesSupplySupply
EconomicsEconomics is the academic disciplineacademic discipline most discussedmost discussed by the general public. It is also one of the least understoodleast understood. [[ ““Language of graphsLanguage of graphs””]]
The economistThe economist’’s lab is the real s lab is the real world.world. They donThey don’’t t conduct controlledconduct controlled laboratory experiments. They laboratory experiments. They are predicting human behavior.are predicting human behavior.
PhysicistsPhysicists explore the explore the physical worldphysical world. . EconomicsEconomics as a social science looks as a social science looks
at theat the behaviorbehavior of of peoplepeople in the marketplace.in the marketplace.
Economics is Economics is notnotan an ““exact scienceexact science””but it gives but it gives ““likely likely resultsresults””..
SOCIETY HAS VIRTUALLYSOCIETY HAS VIRTUALLY UNLIMITED WANTS... UNLIMITED WANTS...
NECESSITIESNECESSITIES
FoodFood ClothingClothing ShelterShelter
LuxuriesLuxuries
V.V..
FoodFood, , clothingclothing, , sheltershelter,,Chrysler 300, mansion, Nintendo DS,Chrysler 300, mansion, Nintendo DS,
jewelry, iPod, projector, digital camera,jewelry, iPod, projector, digital camera,good health, children, camcorder, laptopgood health, children, camcorder, laptopwarmth, indoor plumbing, rollerblades,warmth, indoor plumbing, rollerblades,a sense of personal worth, Plasma TV,a sense of personal worth, Plasma TV,
literacy, high economics grade, cellliteracy, high economics grade, cellphone, compact discs, Wiiphone, compact discs, Wii
““NeedNeed”” those first those firstthree to survive.three to survive.
Unlimited Human WantsUnlimited Human Wants Limited ResourcesLimited Resources
LandLand,, LLaborabor,, CCapitalapital,, EEntrepreneurntrepreneurRRent,ent, WWagesages, , IInterestnterest, , PProfitsrofits
Basic Economic ChoicesBasic Economic ChoicesWhat to produceWhat to produceHow to produceHow to produce
Who receivesWho receivesWhat, how, & What, how, & for whom.for whom.
Answers Determine TheAnswers Determine TheTypeType of of Economic SystemEconomic System
MarketMarketTraditional Traditional CommandCommand
.
Economics Economics – the study of the choices people make in an effort to satisfy their unlimited needs & wants from limited (scarce) resources.
GoodGood is a physical object (tangibletangible) that can be purchased. [These can be seen and feltseen and felt – car, book ] ProductProduct ServiceService is useful laboruseful labor done for a fee (intangibleintangible).
[These are activities, not items – lawyer or doctor services]
Are the following a good or a service?Are the following a good or a service? Watch? Watch Repair? Hamburger? Education? Basketball? Clothing? Bicycle? Hair cut? Garbage pickup? Jumpdrive?
Producers (suppliers)Producers (suppliers) – people who make goods/svcsmake goods/svcs.
ConsumersConsumers – people who buybuy and and use goods/servicesuse goods/services.
SupplierSupplier ConsumerConsumer33
44
11
22EconEcon
.
Real CapitalReal Capital v.v. FinancialFinancial CapitalCapital
FINANCIALFINANCIAL CAPITALCAPITAL[stocks, bonds, and money][stocks, bonds, and money]
REALREAL CAPITALCAPITAL[tools, machinery, & factories]
CanCan produce something produce somethingdirectly with thesedirectly with these
CanCan’’tt produce anything produce anythingdirectly with thesedirectly with these
..
Do the Benefits outweigh the cost?Do the Benefits outweigh the cost?Scales of EconomicsScales of Economics
Expected marginal benefits Expected marginal costsExpected marginal costs
Choices are primarily marginal – not all or nothing.Choices are primarily marginal – not all or nothing.
2020. The Three Basic Questions...Three Basic Questions... WhatWhat, howhow, & for whomfor whom
1. What will be produced?1. What will be produced?
The Three Basic Questions...The Three Basic Questions...
2. How will the goods be produced?2. How will the goods be produced?
1. What will be produced?
The Three Basic Questions...The Three Basic Questions...
2. How will the goods be produced? 1. What will be produced?
3. Who will get the goods & services?3. Who will get the goods & services?
Most needy or most moneyMost needy or most money
LimitedLimitedResourcesResources
UnlimitedUnlimitedWantsWants ChoicesChoices
WHATWHAT G/S G/Sto produce?to produce?
WHOWHO will receive will receivethe G/S produced?the G/S produced?
[Eskimo/pygmy][Eskimo/pygmy]
Answers to the above determine:Answers to the above determine:ECONOMIC SYSTEMSECONOMIC SYSTEMS
3 BASIC 3 BASIC ECONOMICECONOMICQUESTIONSQUESTIONS
TRADITIONALTRADITIONAL FREE MARKETFREE MARKETCOMMANDCOMMAND
HOWHOW will the will the G/S be produced?G/S be produced?
