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Economics 101

Economics 101. Why Societies Have Economics. Trade = the exchange of goods and services Economics = the study of the production, consumption and distribution of resources Trade and Economics satisfy people’s needs and wants. Engaging in Economics.

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Economics 101

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  1. Economics 101

  2. Why Societies Have Economics • Trade = the exchange of goods and services • Economics = the study of the production, consumption and distribution of resources • Trade and Economics satisfy people’s needs and wants

  3. Engaging in Economics • Producers = people who use resources to make goods and services • Consumers = people who buy and/or use goods and services to satisfy wants • Incentive = something that influences the behavior of people

  4. Factors of Production • Labor = includes time and energy (ex: using my time and energy to deliver SMART Boards) • Land = made up of the many natural resources that are needed to help produce goods and services (ex: gasoline for the truck) • Capital = anything produced in an economy that is used to produce other goods and services (ex: box cutters, Box Truck, boots)

  5. Opportunity Cost • Opportunity Cost = the highest valued benefit given up when a choice is made (ex: sitting in traffic vs. unemployment)

  6. Scarcity • Scarcity = the problem that resources are always limited compared with the number and variety of wants people have

  7. Supply and Demand • Demand = the amount of a product or service that buyers are willing and able to consume at different prices. • Supply = the amount of a product that producers are willing and able to offer at different prices.

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