When you hear the Stones sing this… what goes through your mind???? .

When you hear the Stones sing this… what goes through your mind????

http://www.youtube.com/watch?v=tKeSRsy2l9E

What is Economics????Make a T-chart for LIFE!!

In life I WANT: In life I NEED:

- The New JC Heels- - …

- Water- - …

At least 5 things

At least 5 things

How can we satisfy unlimited wants with limited resources?

• The people who can figure that our are called economists. They are smart…

• …& they are loaded

We can make good

CHOICES that negate

the need to rely

on economists

Needs: food, clothing, shelter = tools for survival

Wants: anything that’s not a “need”… cars, I-everything, jewelry, Uggs, ray-bans, etc…

Organizing “wants” vs. “needs” in societies is the main focus of economics

Economics: study of how individuals, families, businesses & societies use limited resources to fulfill their unlimited wants. It is divided into Microeconomics &

Macroeconomics.

you

Newto

wn

us C.R.

Microeconomics Macroeconomics

Microeconomics

Deals with behavior & decision making by small units such as individuals & firms

VS.

Macroeconomics

Deals with the economy as a whole & decision making by large units such as gov’ts

=

The Problem of Scarcity• At any time, a fixed

(limited) amount of resources is available

• People have competing uses for these resources

• This situation results in scarcity

Scarcity: people do not & cannot have enough income & time to satisfy their every want

• What you buy as a student is limited by the amount of income you have (or don’t have!)

• Even if 100% of the world was rich, scarcity exists – Even the richest person doesn’t have unlimited time

Scarcity always exists while things like shortages are temporary

example: a fire burns down a McDonalds so locals can’t buy burgers (shortage) … In time, that

McDonalds will be rebuilt & continue producing burgers.

Want, Willingness, AbilityConfused as to whether you should make a purchase?

Not sure if you “need” or “want” something?...

The Key Is All Three:Want, Willingness, Ability

?? Think About It ??

• What is one thing you WANT to buy, but are not willing or able to buy?

• What is one thing you are WILLING to buy but do not necessarily want, or are not able to buy?

• What is one thing you are ABLE to buy, but do not necessarily want, or are not willing to buy?

HOUSE

LIFE INSURANCE

FLU SHOT

?? ?

What is Economics?In life I WANT: In life I NEED:

12345

12345

Needs: food, clothing, shelter = __________________________Wants: ___________________________________________

cars, I-everything, jewelry, Uggs, ray-bans, etc…

_______________“wants” vs. “needs” in ___________________ is the main focus of ___________________________

__________________________: study of how individuals, families, businesses & societies use limited resources to fulfill their unlimited wants. - It is divided into __________________________ & ___________________________.

____________________Deals with behavior &

decision making by small units such as individuals

& firms

_________________________Deals with the economy as a whole & decision making by

large units such as gov’ts

The Problem of Scarcity- At any time, a _____________ (limited) amount of resources is available- People have competing uses for these resources- This situation results in scarcity

______________: people do not & cannot have enough income & time to satisfy their every want

- What you buy as a student is __________________by the amount of income you have - Even if 100% of the world was rich, scarcity exists

- Even the richest person doesn’t have unlimited time Scarcity always exists while things like ___________________________are temporary

Example: __________________________________________________________________________________________________________________

Want, Willingness, AbilityThe Key Is All Three: