Do Now: Give your best answer to the following Question: What is Economics?

Welcome to Economics DO NOW: In no more than two sentences, tell me what you think the word ECONOMICS means.

Economics – How people choose to use their limited resources to satisfying unlimited wants.

Why do we always want more? Economists believe in a concept called scarcity. Scarcity is the idea that our resources are limited but our wants and desires are unlimited. Think about it. Twenty dollars can buy many different goods. Is there only one item you want? Or would you like more?

Of what kinds of things might people have a scarcity?

Resources: The goods or services available to individuals and businesses used to produce consumer products. Economic resources include land, labor and capital. ... These economic resources are also called the factors of production.

We have so many options but we must choose. We cannot have everything.

Scarcity To think like an Economist, you must always remember that scarcity exists. You may only have ten dollars in your pocket but you can certainly think of a hundred different ways to spend it.

So, how do we choose?

Economics Can Help As we study Economics, we begin to understand that we must make choices. We begin to understand that we cannot have everything we need or want. We begin to understand that with every choice, there is a cost.

If we choose to live near the ocean, we are more likely to experience flooding. Economics is NOT just about money, Benefits: Beautiful view Access to a beach, boating etc…. Can use it as a vacation home and rent it out when you are not their Costs: sometimes dangerous weather flood/hurricane insurance more expensive than properties away from the water.

Every Choice Has Its Cost Economists also teach us that every choice we make has its cost. In other words, every time we get something, we give something else up. There is no such thing as a free lunch.

If we surf the waves, we may break our legs. Even fun activities have their costs.

It’s all about making choices and knowing the costs of those choices.

Questions for Reflection Define Economics. Why must people make choices? Define scarcity. Why do our choices cost us? Define cost. Why is Economics a required course for graduation?