Starter
 What
is economics?
Why Study Economics?
Read the following examples of possible newspaper
headlines and describe how these headline
events could effect you.
1.
War in the Middle East Threatens Oil Supply
2.
Cost of College Education continues to Rise
3.
Government Indicators warn of Possible
Recession
4.
New Law Prevents Teens from Working more
than Two days a Week
5.
Computer Related Industries experience Great
Shortage in Workers
6.
Cost of Health Care continues to Spiral Upward
7.
Unions report that Many Jobs being Lost to
Oversees Workers
Fundamental
Economics
Economic Choices


Economics is the study of how we
make decisions in a world where
resources are limited. It is
sometimes called the science of
decision making.
Needs are things we need for
survival, such as food,
clothing, & shelter. Wants
are things we would
like to have.
Economic Choices (con’t)
 The
fundamental economic problem
is scarcity-we do not have enough
resources to produce all the things
we would like to have. Because of
scarcity, we must make choices
among alternatives.
 Three Decisions Society must make:
What to produce? How to produce?
For whom to produce?
Using Economic Models


The economy includes all the activity in
a nation that together affects the
production, distribution, & use of goods
& services
Economic Models-representations of
the real world, based on economic
theories.
1. Business & gov’t often base decisions
on the model’s responses to tests.
2. Model’s based on assumptions.
3. Economists use models to predict
future of economy.
Trade-Offs
 Economic
choices involve tradeoffs, or exchanging one thing for the
use of another. (For example, when
you by a product, you exchange
money for the right to own that
product rather that something else
you could buy for the same price.)
Trade-Off (con’t)

People, businesses, & societies
make trade-offs every time they
chose to use their resources in one
way & not in another. More money
for education means less money to
spend on medical research or
national defense.
Needs and Wants
 Divide
a sheet of paper in halfhotdog fold
 On one side write Needs. On the
other write Wants
 On the next slide is a list of products.
Place the product in the correct
category (need or want)
 No discussion! Place according to
definition given in class.
toothpaste Soap
Bed
Wristwatch Coat
Jeans
Socks
glasses
MP3 player
Chewing
gum
Air
conditioner
Fruit
Television
Haircut
Water
Pedicure
Computer
Cell phone
Deodorant Movies
Hair spray
Pizza
Microwave Jewelry
oven
vegetables electricity Refrigerator Porsche
911 (car)