ECONOMIC CHOICES. BASIC ECONOMIC PROBLEMS Unlimited wants and needs vs. limited resources Budget cutbacks Operating costs do not always keep up with financial.

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Presentation transcript:

ECONOMIC CHOICES

BASIC ECONOMIC PROBLEMS Unlimited wants and needs vs. limited resources Budget cutbacks Operating costs do not always keep up with financial limitations Scarcity – not having enough resources to satisfy every need Some countries do not produce enough resources for their population Delivery not always available

CHOICES Economic Decision Making - Must make smart economic decisions based on scarcity Must budget income based on needs and availability of items Decide what is needed and what is a luxury Trade-offs and Opportunity Costs – Trade-offs – When you give up something to have something else Opportunity Costs – Value of the next best alternative (helps control prices, affects decision making process)

THE DECISION MAKING PROCESS Define the Problem Problem must be clearly defined to make a smart decision Identify the Choices Identify the alternatives to the purchasing choice you will make Evaluate Advantages & Disadvantages How does purchasing an item affect your life, both positively and negatively

THE DECISION MAKING PROCESS Choose the Best Alternative Select the choice that is the best for you (financially, physically, mentally) Act On Your Choice Purchasing the item or service Review Your Decision Review the results of your decision. (buy again, have the service again?)