What Is Economics?  Economics:  The study of the choices and decisions that affect making, distributing, and using goods and services

Scarcity & Opportunity Cost  Scarcity:  Economic problem of people having unlimited wants and needs with limited resources  Opportunity Cost:  The cost of passing up the next best choice when making a decision

Opportunity Cost Example  Example:  Choosing to watch a football game on TV instead of going to the game.  What is the Opportunity Cost?

Trade-offs  Trade-offs:  sacrifice one thing to obtain another  Example:  You only have enough cash to buy a bike or a snowboard, but not both

Incentives  Incentives:  Any factor (financial or non-financial) that enables or motivates a particular course of action  You must give the consumer incentives because without them, they would have no reason to do what you ask

Supply and Demand  Supply:  The amount of goods producers are able to make and sell  Demand:  The amount of goods customers are willing and able to buy  Equilibrium:  Supply = Demand

Demand Supply Equilibrium Law of Supply & Demand

Shortage and Surplus  Shortage:  Supply Low  Demand High  Price High  Surplus:  Supply High  Demand Low  Price Low

Economic Impact Activity  See Economic Impact PowerPoint