SCARCITY & DECISION MAKING Notes

THE BASIC ECONOMIC PROBLEM  Scarcity  Not having enough resources to satisfy every need  Requires Economic Decision-Making  Scarcity forces individuals, businesses, and governments to make choices

MAKING A CHOICE  Economic Decision-Making  process of choosing which wants, among several options, will be satisfied  Trade-off  when you give up something to have something else  Opportunity cost  the value of the next-best alternative that you did not choose

SUPPLY & DEMAND Consumers Demand Producers Supply  Consumer  person who buys and uses goods and services  Consumers set Demand  the quantity of a good or service that consumers are willing and able to buy  Producers  individuals and organizations that determine what products and services will be available for sale  Producers set Supply  the quantity of a good or service that businesses are willing and able to provide

THE CONSUMER DECISION MAKING PROCESS Define the problem. Identify the choices. Evaluate the advantages and disadvantages of each choice. Choose one choice. Act on your choice. Review your decision.

ON YOUR OWN  Create a 6 slide comic strip illustrating the Economic Decision Making process.