what is economics?. i. what is economics? a. definition: economics is a social science that deals...

16
What is Economics?

Upload: myles-summers

Post on 20-Jan-2016

215 views

Category:

Documents


2 download

TRANSCRIPT

Page 1: What is Economics?. I. What is Economics? A. Definition: Economics is a social science that deals with how consumers, producers, and societies choose

What is Economics?

Page 2: What is Economics?. I. What is Economics? A. Definition: Economics is a social science that deals with how consumers, producers, and societies choose

I. What is Economics?A. Definition: Economics is a

social science that deals with how consumers, producers, and societies choose among the alternative uses of scarce resources in the process of producing, exchanging, and consuming goods and services

Page 3: What is Economics?. I. What is Economics? A. Definition: Economics is a social science that deals with how consumers, producers, and societies choose

II. What do we mean by scarce resources?

A. Scarcity refers to the finite quantity of resources that are available to meet society’s needs

Page 4: What is Economics?. I. What is Economics? A. Definition: Economics is a social science that deals with how consumers, producers, and societies choose

B. What are resources?

1. 3 kindsa. Natural resources (land)

landwatermineralsbiological

Page 5: What is Economics?. I. What is Economics? A. Definition: Economics is a social science that deals with how consumers, producers, and societies choose

b. Human resources (labor)c. Manufactured resources

(capital)machines & equipmentstructures

Page 6: What is Economics?. I. What is Economics? A. Definition: Economics is a social science that deals with how consumers, producers, and societies choose

C. Because resources are scarce we have to make choices about how best to use them

1. Choice has a time dimensiona. Going to college today increases earning potential in the future

Page 7: What is Economics?. I. What is Economics? A. Definition: Economics is a social science that deals with how consumers, producers, and societies choose

2. Choice has an opportunity cost

a. Interest that could have been earned from money spent on a carb. Salary that could have been earned at a job instead of going to college

Page 8: What is Economics?. I. What is Economics? A. Definition: Economics is a social science that deals with how consumers, producers, and societies choose

3. Choice leads to specialization

a. Choose to use resources for what they are best suited forb. Teacher pays someone to provide medical advise, work on car, etc.c. U.S. exports grains and imports coffee

Page 9: What is Economics?. I. What is Economics? A. Definition: Economics is a social science that deals with how consumers, producers, and societies choose

III. 2 branches of economics

A. Microeconomics1. Focuses on the economic actions of individuals or specific groups

Page 10: What is Economics?. I. What is Economics? A. Definition: Economics is a social science that deals with how consumers, producers, and societies choose

B. Macroeconomics1. Focuses on aggregates, totals, big groups

a. Wealth of a whole countryb. Policies that effect the nation

growth of the economyinflationunemploymentmonetary policyfiscal policy

Page 11: What is Economics?. I. What is Economics? A. Definition: Economics is a social science that deals with how consumers, producers, and societies choose

IV. Alternative economic systems

A. Definition of an economic system: “The institutional means by which resources are used to satisfy human desires.”

Page 12: What is Economics?. I. What is Economics? A. Definition: Economics is a social science that deals with how consumers, producers, and societies choose

1. Institutionsa. Laws

ex: protecting private property & enforcing contracts

b. Habits & customsex: businesses display their prices &

consumers usually pay that pricec. Ethics

ex: bureaucrats give you a license for a business without being paid a bribe

Page 13: What is Economics?. I. What is Economics? A. Definition: Economics is a social science that deals with how consumers, producers, and societies choose

B. Capitalism

1. A free market economic system in which individuals own resources & have the right to employ their time & resources however they choose, with minimal legal constraints from government.

Page 14: What is Economics?. I. What is Economics? A. Definition: Economics is a social science that deals with how consumers, producers, and societies choose

C. Socialism

1. A centrally planned economic system in which resources are generally collectively owned & government decides how resources are to be used.

Page 15: What is Economics?. I. What is Economics? A. Definition: Economics is a social science that deals with how consumers, producers, and societies choose

D. Mixed economic system

1. An economic system in which some markets are not entirely free to determine price. Government may control selected markets & a welfare system may influence the labor market.

Page 16: What is Economics?. I. What is Economics? A. Definition: Economics is a social science that deals with how consumers, producers, and societies choose

2. The U.S. is mostly a capitalist system with several aspects of a mixed economy.a. Minimum wage law controls minimum price paid for laborb. Prices controlled in some ag and utility markets