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ECONOMICS-THE STUDY OF HOW PEOPLE CHOOSE TO USE SCARCE RESOUCES TO SATISFY THEIR NEEDS AND WANTS.

ECONOMICS-THE STUDY OF HOW PEOPLE CHOOSE TO USE SCARCE RESOUCES TO SATISFY THEIR NEEDS AND WANTS. Needs- food, clothing and shelter Wants: desires, luxury items Economics involves:

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ECONOMICS-THE STUDY OF HOW PEOPLE CHOOSE TO USE SCARCE RESOUCES TO SATISFY THEIR NEEDS AND WANTS.

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  1. ECONOMICS-THE STUDY OF HOW PEOPLE CHOOSE TO USE SCARCE RESOUCES TO SATISFY THEIR NEEDS AND WANTS. • Needs- food, clothing and shelter • Wants: desires, luxury items • Economics involves: • Examining how individuals, government, businesses and societies choose to use scare resources to satisfy needs and wants. • Organizing, analyzing and interpreting data about economic behaviors. • Developing theories and economic laws that explain how the economy works and to predict what might happen in the future. $130 $4.15 July Jan. . ?

  2. Scarcity- - unlimited wants with limited resources. . Wants are unlimited and ever changing People satisfy needs and wants with goods and services Goods- tangible items of value- Service-intangible items of value Consumer- a person who buys goods and services Producer- a person who makes goods and provides services Scarcity requires all societies to address the three basic economic questions • What will be produced? • How will it be produced? • For whom will it be produced?

  3. What will be produced is based in part on the natural resources of the country and in some countries consumers and producers decide in other countries the government decides.What to produce also includes how much to produce Ex: Wartime production differs from peacetime production. How will it be produced-most efficient manner. Labor intensive- cost of labor relative to machinery is less Capital intensive cost of machinery relative to labor is less. For whom will it be produced- determined by who is willing to pay or should everyone get an equal share. Whom also involves a distribution system.

  4. The Four Factors Of Production 1. LAND- includes not only land but also water, minerals, forests, wildlife, gas, oil

  5. 2.Labor-human time, effort and talent that go into making a product or providing a service.

  6. 3. Capital- Factories, machines, tools and the money to buy them Human Capital- education and training, and skills gained through experience. 4.Entrpreneurship- skills, vision and risk taking needed to create new products or innovate.

  7. Philanthropy Quotes Acts 20: 35 It is more blessed to give than to receive . Chinese Proverb The family that perseveres in good works will surely have an abundance of blessings. Bill Clinton We live in an interdependent world.  Every time you cut off somebody else's opportunities, you shrink your own horizons. Confucius When wealth is centralized, the people are dispersed. When wealth is distributed, the people are brought together.

  8. Diana, Princess of Wales Nothing brings me more happiness than trying to help the most vulnerable people in society. It is a goal and an essential part of my life - a kind of destiny. Charles Dickens No one is useless in this world who lightens the burdens of another. Henry Ford The highest use of capital is not to make more money but to make money to do more for the betterment of life. Anne Frank How wonderful that no one need wait a single moment to improve the world. Benjamin Franklin A man wrapped up in himself makes a very small bundle. I would rather have it said, 'He lived usefully,' than, 'He died rich.‘ The practice of charity will bind us...will bind all men in one great brotherhood. Bob Hope If you haven't got any charity in your heart, you have the worst kind of heart trouble. Lee Iacocca My father used to say, 'You can spend a lot of time making money. The tough time comes when you have to give it away properly.' How to give something back, that’s the tough part in life.

  9. Jane Addams Social advance depends quite as much upon an increase in moral sensibility as it does upon a sense of duty. Aesop No act of kindness, no matter how small, is ever wasted. .Maya Angelou One must know not just how to accept a gift, but with what grace to share it. Aristotle To give away money is an easy matter and in any man's power. But to decide to whom to give it and how large and when, and for what purpose and how, is neither in every man's power nor an easy matter. Henry Ward Beecher Every charitable act is a stepping stone towards heaven. Michael Bloomberg Every dollar makes a difference. And that's true whether it's Warren Buffet's remarkable $31 billion pledge to the Gates Foundation or my late father's $25 check to the NAACP. .Pearl S. Buck The test of a civilization is in the way that it cares for its helpless members. Andrew Carnegie Wealth is not to feed our egos but to feed the hungry and to help people help themselves.

  10. Scarcity forces all of us to make choices. In making choices we must consider the utility of the good or service we are going to purchase. How do you measure utility? Utils 0_____________________________________________10

  11. TRADE-OFFS AND OPPORTUNITY COST Trade-off-the alternative you give up when you make an economic choice. Opportunity cost-the value of the most desirable alternative not chose. Opportunity Benefit-the benefit to you of the economic choice you made. Cost-benefit analysis- examining cost and expected benefits Decision making grid page 15 text. Marginal cost and marginal benefit

  12. PRODUCTION POSSIBILITIES CURVE Assumptions 1.Resources are fixed 2. All resources are fully employed 3.Only two things can be produced 4.Technology is fixed Guns in millions Butter in millions of pounds

  13. On a paper to be handed in graph the production possibilities curve from your notes add the points given in the following questions. Label them F,G,H then answer the questions. • Is it possible using the given production possibilities curve to produce 300 millionguns and 250 millionunits of butter? Why or why not? • Is it possible using the given production possibilities curve to produce 200 millionguns and 150 millionunits of butter? Why or Why not? • What is happening in relationship to resources if the production combination is 75 millionguns and 50 millionunits of butter?

  14. microeconomics- Macroeconomics Positive economics- verifiable facts, not value judgments, strongly supported by data. Normative economics- value judgments, recommendations for action

  15. S M I T H A D A M

  16. .Free Enterprise Adam Smith- prevailing economic system THREE IMPORTANT THEORIES IN THE WEALTH OF NATIONS

  17. The Influence of Adam Smith Adam Smith’s writings influenced writers and political leaders in America at the time of the American Revolution. Jefferson in the Declaration of Independence mentioned many economic injustices inflicted on the colonists by Great Britain. Example( restriction of trade, tax on tea and the Stamp Act) James Madison in the Constitution sighted economic freedoms Fourth and Fifth Amendments, Article one section 9 Alexander Hamilton- The Federalists Karl Marx- Anti Capitalism

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