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Welcome to Economics

•Economics is a required course for graduation.

•A great economist once said that Economics is “the study of mankind in

the ordinary business of life.”

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Studying Economics will help us in ourdaily lives.

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So, what is Economics?

• The dictionary definition of Economics is that Economics is the study of the production, distribution, and consumption of goods and services.

• But Economics is much more than that.

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Here’s a clue: No matter how muchmoney we have, we always want more. Yes, we always want more.

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Why do we always want more?

• Economists believe in a concept called scarcity.

• Scarcity is the idea that our resources are limited but our wants and desires are unlimited.

• Think about it. Twenty dollars can buy many different goods. Is there only one item you want? Or would you like more?

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We have so many options but we mustchoose. We cannot have everything.

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Scarcity

• To think like an Economist, you must always remember that scarcity exists.

• You may only have ten dollars in your pocket but you can certainly think of a hundred different ways to spend it.

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So, how do we choose?

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Economics Can Help

• As we study Economics, we begin to understand that we must make choices.

• We begin to understand that we cannot have everything we need or want.

• We begin to understand that with every choice, there is a cost.

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If we choose to live near the ocean,we are more likely to experienceflooding.

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Every Choice Has Its Cost

• Economists also teach us that every choice we make has its cost.

• In other words, every time we get something, we give something else up.

• There is no such thing as a free lunch.

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If we surf the waves, we may breakour legs. Even fun activities havetheir costs.

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It’s all about making choices and knowing the costs of those choices.

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Questions for Reflection

• Define Economics.• Why must people make choices?• Define scarcity.• Why do our choices cost us?• Define cost.• Why is Economics a required course for

graduation?