Economics and ATVs

1. Economics and ATVs

2. What is Economics? • The study of choices that people make to satisfy their needs and wants.

3. There are two large groups of economic “decision makers” Who makes decisions? • Consumers – people who decide to buy things • Producers – people that make the things that satisfy consumers’ needs and wants

4. How do you make decisions? • Based on your needs and wants • Needs – necessary for survival: food, shelter, etc. • Wants – goods & services that people consume beyond what is necessary for survival: ipod, etc.

5. ATV and Needs/Wants • Farm Operator • Need or Want? • Teenager • Need or Want?

6. Is an ATV a Good or a Service? • Goods – physical objects that can be purchased • Services – actions or activities performed for a fee

7. Think About It? • How can an ATV be both a good and a service?

8. Choices in Economics • We choose among various alternatives depending on future rewards or consequences • We will hopefully pick the best choice possible

9. Think About It… • What are the future rewards and consequences you must look at when deciding to wear/not wear a helmet when riding an ATV?

10. Costs • What are the costs of Brad not wearing his helmet? • How did his choice have an economic impact?

11. Opportunity Cost • The cost of a good measured in terms of lost opportunity to pursue the best alternative activity with the same time and resources

12. Think About It… • Wear the helmet? • Do not wear the helmet? • What are the opportunity costs of each choice?

13. Human Capital • The set of skills in which a person acquires on the job, through training and experience, and which increases that person’s value in the marketplace and community

14. Think About It…. • How did Brad’s ATV injury impact his human capital? • His productivity?

15. How are these related?

16. What does this represent?