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What is economics?
Economic choices We are faced with choices because we do not have enough productive resources to satisfy all of our wants and needs.
Economics: the study of how we make decisions in a world where resources are limited.
Need or want? Wants Needs Required for survivalThings we would like to have
The fundamental economic problem is scarcity (when we do not have enough resources to produce all of the things we would like to have).
Making economic decisions
Trade-offs Have to take all aspects of transactions into accountEx: you trade money to buy a product
Opportunity cost is the next best thing that you had to give up for the choice you made (includes money and inconveniences)
Fixed costs do not change no matter how much is producedVariable costs change w/the amount produced
Fixed Costs + Variable Costs=Total Cost
Marginal cost is the cost of producing one more unit of output.Businesses look at total and marginal cost to determine final cost
Cost-Benefit analysisEcon. model that compares marginal costs and benefits Benefits should outweigh the costs when making decisions
Your role in the economyU.S. has a market economy Choices you make affect choices businesses make (like what to make or how much to charge)
Market economies are based on capitalism and free enterpriseIncentives try to persuade people to make certain economic decision
Making wise choices Rational choice involves consumer’s perceptionsBenefits society by making the best use of scarce resources
BUSINESS BASICS Final BUSINESS BASICS Final. An entrepreneur is a risk-taker in search of profits.
Citizens must make them every day. Choices occur because resources are limited Needs are required, such as food and shelter Wants make life more.
LECTURE # 1: WHAT IS ECONOMICS?
What is Economics? Chapter 18.
ECONOMIC PRINCIPLES Unit 1.
Ten Principles of Economics
AP Macroeconomics Key Assumptions in Economics, Scarcity, Opportunity Cost and the Production Possibilities Curve.
Copyright © 2004 South-Western/Thomson Learning 1 Ten Principles of Economics.
Economics Unit 1 Notes. Economic Choices Economics: the study of how we make decisions in the world where resources are limited. Scarcity: forces you.
Introduction to Economics Chapter 17
Chapter 18 Objectives: 7.01, 7.02, How Economic Systems Work We choose between: –Needs: things required for survival –Wants: things we desire and.
What is Economics Basic Economics. Section 1: The Fundamental Economic Problem Economics The system that society uses to produce and distribute goods.
Introduction to Economics How we make decisions in a world where resources are limited.
Copyright © 2004 South-Western/Thomson Learning Social Sciences Social Sciences are the study of people….. What are the Social Sciences? Then define Econ.
Standard SSEF1 The student will explain why limited productive resources and unlimited wants result in scarcity, opportunity costs, and tradeoffs for individuals,
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