Economic Choices Unlimited Wants What are we referring to when we say… Unlimited Needs

Why does this happen? Economic Choices o The mismatch of unlimited wants and needs and limited economic resources is known as the basic economic problem. o Scarcity refers to not having enough resources to satisfy every need o The process of choosing which needs and wants will be satisfied is known as Economic Decision Making

Economic Choices o When you give up something to have something else you are making a tradeoff. o Ex. You are not able to buy a pair of shoes because you spent your money on a movie, popcorn and a drink

1.Define the problem- What is the problem to be resolved. Example: Need a car 2. Identify the Choices– Do your research. Identify and consider all alternatives. Example: Toyota Corolla/Honda Civic This process helps you select the best and most satisfying alternative from among a set of choices.

Why should the opportunity cost be carefully considered when making a decision? 3. Evaluate the advantages and disadvantages of each choice – list advantages and disadvantages of each one. o Opportunity Cost ~ The tradeoff that results from your decision. It is what you are willing to give up in order to have your first choice. o Example: I’m willing to give up the convertible in order to purchase a sedan. o Value can be measured in dollars, time, convenience, enjoyment, etc

4. Choose the best alternative – Select the choice you believe will be the best for you at this time. 5.Act on your choice - Based on research and data gathered choose option best for you. Example: Buy the Honda Accord 6.Review your decision – After time has passed think about your decision again. ◦ What was good and not so good about your choice? ◦ If you had to do it over gain would you make the same choice? ◦ Were there consequences you did not identify?

 Create a poster by yourself (30 points)  Poster to include: ◦ What problem do you need to solve? (10 points) ◦ Use the decision making process (steps 1-6) to help you decide. (15 points) ◦ Creativity (5 points) ◦ 30 points total