Economics
What is Economics?
● Economics is a social science. It seeks to explain society.
● Economics is the study of choice under conditions of scarcity
● It is not just about memorization, but about a way of thinking, understanding, and doing.
Our Textbook definition of Economics
● The science which studies human behavior as a relationship between ends and scarce
means which have alternative uses.
● The study of how societies use scarce resources to produce valuable commodities and
distribute them among different people.
● The study of given ends and scarce means.
Our Resources
● Products are tangible objects that a company sells to customers for their use or
consumption.
● Services are also sold by a company and are also sold to consumers, but unlike products,
they are intangible. (Repairs, Insurance, Consultations, etc.)
Economics teaches us how to choose…
What is the cost of a choice?
● Opportunity Cost is what we must give up when we make a choice.
TWO MAJOR AREAS OF ECONOMICS
● MICROECONOMICS
- Studies the behavior of individual households, firms and governments as they interact in
specific markets.
, ● MACROECONOMICS
- Concerns itself with the behavior of the entire company
- Considers variables such as total output and total employment.
The Four Types of Resources
● Labor - the time human beings spend producing goods and services.
● Capital - any long-lasting tool that is itself produced and helps us make other goods and
services
● Land - the physical space on which production takes place, as well as the useful
materials - natural resources found under it or on it.
● Entrepreneurship - the ability and willingness to combine other resources into a
productive enterprise.
Supply and Demand
- Is an economic model designed to explain how prices are determined in certain types of
markets.
What is a “market”?
● A market is a group of buyers and sellers with the potential to trade with each other.
● The buyers and sellers in a market don't have to be in the same location, or even in the
same country. (e.g. market for chicken, motorcycles, energydrinks, etc.)
What is Economics?
● Economics is a social science. It seeks to explain society.
● Economics is the study of choice under conditions of scarcity
● It is not just about memorization, but about a way of thinking, understanding, and doing.
Our Textbook definition of Economics
● The science which studies human behavior as a relationship between ends and scarce
means which have alternative uses.
● The study of how societies use scarce resources to produce valuable commodities and
distribute them among different people.
● The study of given ends and scarce means.
Our Resources
● Products are tangible objects that a company sells to customers for their use or
consumption.
● Services are also sold by a company and are also sold to consumers, but unlike products,
they are intangible. (Repairs, Insurance, Consultations, etc.)
Economics teaches us how to choose…
What is the cost of a choice?
● Opportunity Cost is what we must give up when we make a choice.
TWO MAJOR AREAS OF ECONOMICS
● MICROECONOMICS
- Studies the behavior of individual households, firms and governments as they interact in
specific markets.
, ● MACROECONOMICS
- Concerns itself with the behavior of the entire company
- Considers variables such as total output and total employment.
The Four Types of Resources
● Labor - the time human beings spend producing goods and services.
● Capital - any long-lasting tool that is itself produced and helps us make other goods and
services
● Land - the physical space on which production takes place, as well as the useful
materials - natural resources found under it or on it.
● Entrepreneurship - the ability and willingness to combine other resources into a
productive enterprise.
Supply and Demand
- Is an economic model designed to explain how prices are determined in certain types of
markets.
What is a “market”?
● A market is a group of buyers and sellers with the potential to trade with each other.
● The buyers and sellers in a market don't have to be in the same location, or even in the
same country. (e.g. market for chicken, motorcycles, energydrinks, etc.)
