Introduction to Economics What is “economics”? What are the basic ideas of Econ? Who helped to create the study of Econ? What is “economics”? What are the basic ideas of Econ? Who helped to create the study of Econ?

What is “economics”?  Economics is the study of how a society satisfies their wants with limited resources  How do you divide things up to make the most good?  Economics is the study of how a society satisfies their wants with limited resources  How do you divide things up to make the most good?

Who created the study of economics?  The study of economics has been around since the beginning of human history  Mesopotamia  Ancient Greece  Rome  Gained influence in government during the Industrial Revolution  Late 1700’s ’s  The study of economics has been around since the beginning of human history  Mesopotamia  Ancient Greece  Rome  Gained influence in government during the Industrial Revolution  Late 1700’s ’s

What is the main problem in economics?  The main problem in economics is…scarcity!  What is scarcity?  Scarcity is when a society does not have enough resources to meet all its wants  The main problem in economics is…scarcity!  What is scarcity?  Scarcity is when a society does not have enough resources to meet all its wants

How does scarcity affect a society?  Because of scarcity, societies are forced to ask difficult questions:  What should we produce?  How do we produce these products?  For whom are we making these products?  Because of scarcity, societies are forced to ask difficult questions:  What should we produce?  How do we produce these products?  For whom are we making these products?

Unlimited Wants Limited Resources Society must make difficult choices on how to use their limited resources in order to satisfy their wants 1.What should we make? 2.How should we make it? 3.For whom are we making this stuff?

How does a society know what their resources are?  Resources are recognized through “The Factors of Production”  Land  Labor  Capital  Entrepreneurship (Management)  Resources are recognized through “The Factors of Production”  Land  Labor  Capital  Entrepreneurship (Management)

What is “land”?  What physical materials are available to a society (other than people)?  Minerals  Farmland  Forests  Natural Resources  What physical materials are available to a society (other than people)?  Minerals  Farmland  Forests  Natural Resources

What is “labor”?  What skills does a society’s citizens have?  Skills  Intelligence  Education  Creativity  What skills does a society’s citizens have?  Skills  Intelligence  Education  Creativity

What is “capital”?  What types of wealth does a society have?  Money  Machinery  Tools  Transportation  What types of wealth does a society have?  Money  Machinery  Tools  Transportation

What is “Entrepreneurship”?  Does a society have any risk takers?  Economic leaders  Managers  Business owners  Does a society have any risk takers?  Economic leaders  Managers  Business owners

How do societies in the end deal with scarcity?  Societies deal with scarcity through responsibly utilizing their resources  Constant analysis of options  Opportunity Costs - What could I have bought?  Societies deal with scarcity through responsibly utilizing their resources  Constant analysis of options  Opportunity Costs - What could I have bought?

“There is no such thing as a free lunch”

What types of Economics are out there?  Micro-economics:  The branch of economics that studies the individual people, industries, etc of a society  Micro-economics:  The branch of economics that studies the individual people, industries, etc of a society  Macro-economics:  The branch of economics that studies the society as a whole  Macro-economics:  The branch of economics that studies the society as a whole