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: plastic, metal, fiber glass) 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.