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Introduction to Economics

Introduction to Economics

Excerpt From this Document

Introduction to Economics

Scarcity: the fundamental economic problem

  • Arises because society does not have enough resources to produce all the things people would like to have
  • And so? Why does this affect you?

How and when do you deal with scarcity?

  • iPod example
  • Hybrid cars?

What is economics?

  • By definition: the study of choices that people make to satisfy their needs and wants
  • Microeconomics: SMALL participants (businesses, people, individual markets)
  • Macroeconomics: LARGE participants (governments, countries)

A Problem with Economics

“A careful study of economics usually reveals that the best time to buy anything is last year.” -- Unknown

  • This quote addresses a very important fault of the study of economics. What is this problem? Why does this problem exist?

TINSTAAFL

  • There’s no such thing as a free lunch
  • What’s the COST??
  • Cost is not always just $$
  • Don’t say the “F” word in economics!

Trade-Offs

  • Definition: Alternative choices when spending their income or time.
  • Think of 5 trade-offs for going to the movies on Saturday night.

Opportunity Costs

  • Definition: next best (only one) alternative use of money, time, or resources when one choice is made rather than another.

Difference Between Trade-Offs & Opportunity Costs

  • Trade-Offs: The list of choices you had.
  • Opportunity Costs: The next best choice you COULD HAVE chosen, BUT DIDN’T

Guns & Butter

  • The classic example used to illustrate opportunity costs along the production possibilities frontier.

About this Document

An introductory lecture for a high-school economics class. Covers scarcity, trade-offs, and opportunity costs.

Tags: Business, economics, Grade 11, Lesson Plans, Teachers

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Introduction to Economics Introduction to Economics Introduction to Economics Introduction to Economics Introduction to Economics Introduction to Economics