Chapter 1 What is Economics?

Section 1 An Economic Way of Thinking Objectives for Section 1 Define economics. Identify the factors of production Determine the goal of entrepreneurship.

Introduction Name some of the goods and services you have bought over the past few days.

Introduction Continued List some of the choices you made when deciding to buy these products.

Economics Definition:

Information Microeconomics- study of the choice made by economic factors such as households, companies, and individual markets. Micro- meaning “small” Macroeconomics-examines the behavior of entire economies. Unemployment in the United States.

Economic Decisions Consumers- people who decide to buy stuff. Producers-people who make the things that satisfy consumers’ needs and wants. Goods-are physical objects that can be purchased. Services-are actions or activities that are performed for fee. (i.e. Lawyers, taxi drivers, teachers, etc.)

Economic Resources Resource-is anything that people use to make or obtain what they need or want. Factors of production Natural resources Human resources Capital resources Entrepreneurship

Economic Resources Natural Resources- items provided by nature that can be used to produce goods and to provide services. Human Resources- human effort during production, can be either physical or intellectual. Capital Resources- manufactured materials used to create products, resources include capital goods and money used to purchase.

Economic Resources Capital goods-are buildings, structures, machinery, and tools used in the production process. Consumer goods-Capital goods are the manufactured resources that are used in making finished products. Technology-use of technical knowledge and methods to create new products or make existing products more efficiently.

Economic Resources Entrepreneurship-organizational abilities and risk taking involved in starting a new business or introducing a new product. The goal is to develop a new mix of the other factors of production, creating something of value. Entrepreneur- person who attempts to start a new business or introduce a new product.

Activity We are going to focus on just one of the factors of production-entrepreneurship. You as a group to produce an entertainment guide for our high school. The guide will provide highlights of upcoming event as well as listings of local restaurants, coffee shops, clubs, recreation facilities, and other places of interest to high school students.

Activity continued What natural resources, human resources, and capital resources will you need to produce and sell our entertainment guide?

Economics Notebook You will list your daily activities. How does choice influence you activities? Which activities would you describe as “economic”?