Do Now: In your notebook give your best answer for the question below: Do you think that economics is only about money? If so explain why. If not, What else is it about?

Watch the following video and either correct or add to the answer you wrote to the previous question:

“There’s no free lunch.” What do you think the following phrase means:

“There’s no free lunch.” What do you think the following phrase means: You have to buy a beer ! Salty food (Makes you thirsty)! The bar owner had to buy the food You are spending you time !

“There’s no free lunch.” Even if the lunch was free to you, somebody had to pay for it in some way. (had to make a choice)

“There’s no free lunch.” Every choice has a cost (a trade off). Trade Off – The exchange of one advantage or benefit for another that is thought to be better.

I like to have running water and toilets that flush - So, I make a trade off… a week in Florida for running water Example: I’d like to go to Florida on vacation this winter. If my water pump breaks, then I will need to decide if I would rather have week’s vacation or spend the money on a new water pump

Assignment: Write a two paragraph example (made up or from real life) that illustrates how scarcity forces tradeoffs. Make sure to identify 1. what your scarcity was. 2. How you benefitted from the tradeoff