Excerpt From this Document
- 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)
- Scarcity: the fundamental economic problem. Arises because society does not have enough resources to produce all the things people would like to have.
- Trade-Offs: Alternative choices when spending income or time. Think of 5 trade-offs for going to the movies on Saturday night.
- Opportunity Costs: next best(only one) alternative use of money, time, or resources when one choice is made rather than another.
- Difference Between Trade Trade-Offs & Opportunity Costs: Trade-Offs are the list of choices you had. Opportunity Costs are the next best choice you could have chosen but didn't.
- The Production Possibilities Frontier: When resources are fully used, a country can produce anywhere al along its production frontier. When all resources are not fully used, a country cannot reach it its potential.
- 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 level economics class. Covers scarcity, trade-offs, opportunity costs, has graphs for guns vs. butter. Originally a Powerpoint, converted to a pdf.