Section 1 The Fundamental Economic Problem1节的基本经济问题.pptVIP

What is Economics Basic Economics Section 1: The Fundamental Economic Problem Economics The system that society uses to produce and distribute goods and services The study of how we make decisions in a world where resources are limited Why study economics??? Well informed citizens do more than just vote, we should know about and make smart economic choices… Why does the government pay so much attention to the economy??? B/c resources are limited BOX 2 Needs and Wants A need is something that we “need” Required for survival such as food, clothing and shelter A want-some things that we would like to have. Entertainment, vacations, clothing, shoes, PS3s, jewelry… Things that make life more “comfortable and enjoyable? FUN” Box 2 cont… Goods things that can be made or manufactured/used to satisfy our wants and needs (books, cars) Capital goods the things used to manufacture other goods (tools, machinery) or things that made this school: bulldozers, trucks, hammers.. Consumer goods goods meant to be sold to consumers for use Services work that is done for someone for a certain price What is scarcity? What is the fundamental economic problem? issue of scarcity Scarcity- this occurs when ever we do not have enough resources to produce all of the things we would like to have Section 2: Making Economic Decisions (on back) Trade-offs: (see page 56/59 “economic terms”) The alternative you face if you decide to do one things rather than another Ex: economic choice to buy a DVD player. Or more pollution-free air means less driving Taking more time to study means having less time to… BIG PICTURE? A country wants more $ to go to education, so less money has to go to medical research or National Defense Economics have a term for this broad measure of cost: OPPORTUNITY COST (pg 59 too) Cost of the next best use of your time or $ when you choose to do one thing rather than another. Measures of Costs Fixed costs: Costs or expenses that are the same no matter how many unit