What is Economics?

What is Economics?

Have you ever wondered why:Gas Prices Spike

Food Costs Rise

U.S. Politicians worry when other countries talk about going bankrupt

You can’t get a good interest rate on your savings account

EconomicsThe study of the production & consumption

of goods and the transfer of wealth to produce and obtain those goods

Economics explains how people interact within markets to get what they want or

accomplish certain goals

2 Types of EconomicsMicroeconomics

Focuses on the actions of individuals & industries, like the dynamics between buyers & sellers, borrowers & lenders

MacroeconomicsBroader view by analyzing the economic

activity of an entire country or the international marketplace

ScarcityA Shortage

There is Scarcity because of society’s unlimited wants exceed the economy’s ability to meet these wants

The Law of ScarcityWants

Different luxury car for each day of the week

10-bedroom mansion 4 oz. of Russian Caviar 20-carat diamond ring Full Household staff Private Jet

List only limited to: Time Imagination Appetite

Economy could not produce enough goods & services to meet all wants

Not enough: Land Adult population Skilled workers to build Not enough food

The Law of Scarcity

The imbalance between wants & ability to meet those wants

Says there will never be enough to meet everyone’s wants

Economic Systems

The set of arrangements that a society uses to allocate scarce goods

CapitalismEconomic system that that the factors of

production are privately owned & resource allocation decisions are made by private markets

SocialismEconomic system that land & capital are owned by

the state & the use of these resources is determined by the state

Current EventResearch a topic for a current event

that is taking place anywhere in the world

Topics include:ScarcityEconomic Systems

CapitalismSocialism

Macroeconomics