Economics 101: Making Choices What are the basic ideas of Microeconomics? What influences the decisions we make as consumers? C&E

What is Economics? Economics: decisions concerning production, distribution and consumption of goods and services 2 major fields: Microeconomics: small picture (individuals and businesses) Macroeconomics: big picture (Society, Gov’t, Industries, etc…)

I’ll take “Things We Buy” for 200 Goods: Tangible Services: Intangible Needs: Requirements Wants: Desire How do you decide what to buy?

It’s a “Scarcity” World Scarcity: not having enough Effects all parts of society Drives most economic decisions Causes: Lack of resources Shortage of labor High demand Effects: Competition Alternatives Making choices

Making Choices All consumers make trade-offs Choices are based on resources Something has to be given up Cost v. Benefit: Opportunity Cost: what you could have had (Gave up) Opportunity Benefit: what is gained Benefit should outweigh cost!