Economics By Paul Curcione

Definition of Economics The study of how people and societies choose to spend their money based on the amount of money they have available to spend.

Trade I’ll give you this; you give me that My stuff for your stuff or for your services or for your $$$

Trade Trade between 13 colonies and the mother country

Opportunity Cost (Lost) What you give up in order to get something you want more

Opportunity Cost What did King Ferdinand give up (lost) in order to finance Columbus?

Specialization You are going to make one thing great, instead of trying to make many things not so great.

Specialization Differences in the economies of the 13 colonies (New England, Middle, Southern) Geography affects decision on how to make $

Specialization Allows me to make more stuff which means more $$ for me. The more I can make, the more I can sell, right? But, I also depend on other people making other stuff for me because I don’t make everything I need.

Voluntary Exchange Similar to trade. Two parties or countries exchanging stuff for their mutual benefit

Voluntary Exchange Lewis and Clark did this. What did they exchange?

Productivity Make more $$$ by selling your stuff, or spend less $$ while making your stuff.

Productivity How does technology affect productivity? I.e., steamboat, steam locomotive, telegraph

Price Incentives Anything that reduces the cost of an item (discount, sale, coupon, etc)

Price Incentives What do people want to spend their $$ to buy? I.E. – Virginia settlers grew what?

Supply and Demand Principle The greater the DEMAND for some stuff, the more money you can ask for it. The less the SUPPLY available of stuff, the greater the price you can ask for that stuff. I.E. – (then) – tobacco for cigarettes I.E. – (now) – gasoline for cars

Personal Budget Income In vs. Expenses Out Fixed vs. Variable expenses Wants vs. Needs Importance of saving $$ Why budget (monitor) money?

Fixed vs. Variable Costs One stays the same; the other differs

Wants vs. Needs One you HAVE to have; the other you just WANT

Wants vs. Needs

Save Put $$ away; don’t spend it all

Budget Plan on how much to spend and save

Benefits and Costs What are the benefits and costs of budgeting? What are the benefits and costs of saving? What are the benefits and costs of making purchases?

The End If you spend your money wisely you might grow up to be as rich as me! You know I love kids!