Bell Ringer

Generate a list of ten things that come to mind when you hear the word “Economics”

What is Economics?

Goods and Services

Before getting into the definition of economics, you must have some basic understanding of the difference between a good and a service.

Goods and Services

A “good” is something that is tangible that satisfies people’s wants and desires

A “service” is something that is intangible that satisfies people’s wants and desires

Goods and Services

Wants and Desires

Now you know the difference between a good and a service, and know the difference between tangible and intangible, what are the wants and desires of all individuals??

WE WANT EVERYTHING!!

!

OUR WANTS ARE

UNLIMITED!

Wants and DesiresWe want food, we want water, we

want good grades, we want a haircut, we want money, we want more money, we want a home, we want groceries, we want furniture, we want a car, we want a relationship, we want happiness, we want children, we want to breathe one more breath, we want, we want, we want…

The list is endless.

Definition of EconomicsSo… what is the definition of

economics?“Economics is the study of how individuals and society, experiencing virtually unlimited wants, chooses to allocate its scarce resources to satisfy those wants.”

Great. Sooo… what does that mean?

Definition of Economics“Economics is the study of how individuals and society, experiencing virtually unlimited wants, chooses to allocate its scarce resources to satisfy those wants.”

Definition of Economics“Economics is the study of how individuals and society, experiencing virtually unlimited wants, chooses to allocate its scarce resources to satisfy those wants.”

ScarcityWhat does it mean when

something is scarce?◦There is a limited amount of it.◦All resources are limited.

It’s as if there’s a constant fight between our unlimited wants and our limited resources.

ScarcityWhen our unlimited wants come

up against our limited resources, there is always a cost.

This cost can be more than monetary…◦There are social costs, emotional

costs, health costs, etc.Nothing(!) on Earth is “free”“There’s no such thing as a free

lunch.”

Definition of EconomicsEconomics = ScarcityScarcity = Wants > Available Resources

Therefore…Economics = Wants > Available Resources

Definition of Economicshttp://www.youtube.com/watc

h?v=nWPrMmv1Tis

Types of Resources1. LandLand is a scarce resource

because there’s a limited amount of it.

In economics, land means any natural resource within, on, or above the earth.

Examples??◦Air, water, raw materials

Types of Resources2. LaborLabor is a scarce resource

because there’s only so many people willing and able to do certain jobs.

Types of Resources3. CapitalIn economics, capital refers to a

physical item used in the production process.

Examples??Capital is a scarce resource

because there are a limited number of factories, machines, etc., and only a certain number of people that can afford them.

When you think capital, think…

Factories!

Types of Resources4. EntrepreneurshipAn entrepreneur is an individual

who is willing to take a risk to start a business.

Why are entrepreneurs a scarce resource?

Because there are a limited number of individuals that want to start their own business.

ReviewGoods are _________ ; services are

__________

Wants are __________; resources are __________

Economics = ________ > __________

The four types of scarce resources are ______, ______, ______, & ______

ReviewCreate a definition of

economics in your own words.

ReviewPg. 7, Questions #2 & 9