1. Economics Thursday, February 5, 2015

2. Opening Question What is the difference between WANT and NEED?

3. What you desire. What you’d like to have. MORE! What’s required for survival. In Economics, “Needs” are no different than “Wants”

4. How available something is. Most things are scarce to some degree Things that are freely available everywhere. e.g., Air

5. The study of the allocation of scarce resources in the presence of seemingly unlimited wants.

6. Things only have value if they are wanted. Value increases with desire and scarcity. How satisfied you are. People will try to maximize utility – not necessarily just wealth.

7. There’s No Such Thing As A Free Lunch Every decision has costs as well as benefits

10. $8 x 3 = $24 (you can subtract cost of food = $20.50) = OC plus actual costs = $20.50 + $10 + $4.50 = $35

11. Machinery or tools used in production Workers in production Property and inputs used in production Coordinator of production (RESOURCE S)

12. Purchased by individuals for personal use Purchased by business to produce more goods Tools; Machines Goods that last several years (cars; appliances) Goods that are consumed quickly (food; clothes)

16. Goods Market Factor Market Businesses Consumers Money Goods

18. Economic Systems Market An arrangement where buyers and sellers exchange goods and services. Does not need to be a physical location. Free Market A market where exchange is voluntary. Buyers and sellers decide for themselves what and how much to buy or sell Consumer Sovereignty It is the demands of consumers that decide what and how much is produced