1. Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE1 Economic Choices Goals Understand the basic economic problem. Explain the steps in the decision-making process. 1-2

2. Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter 1 2 Key Terms scarcity economic decision-making tradeoff opportunity cost

3. Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter 1 3 THE BASIC ECONOMIC PROBLEM Comes from scarcity Not having enough resources to satisfy every need Choices Economic decision-making: process of choosing which wants are satisfied Tradeoffs and opportunity costs Tradeoff: when you give up something Opportunity cost: value of the choice you did not choose

4. Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter 1 4 THE DECISION-MAKING PROCESS Define the problem Identify the choices Evaluate the advantages and disadvantages of each choice Choose one Act on your choice Review your decision