CE.11a Economics Vocabulary

Civics Economics Vocabulary (CE.11a)

An Intro to Economics

Open Ended

What is a choice? What are some examples of choices we make?

You have a Choice...What is choice?

Choice is the selection of an item or action from a set of possible alternatives. Individuals must choose or make decisions about desired goods and services because these goods and services are limited.

The Basic Economic Problem

• We have unlimited wants, but our resources are limited. 

• The goods and services we want exceed our ability to produce them. 

• Scarcity forces consumers, producers, and governments to make difficult choices. 

• Example: Every middle schooler wants a PS5 right now, but the manufacturers only have enough resources to put very little on the market right now.

The Definition of Economics

The study of how individuals and societies choose to allocate those scarce resources.

Open Ended

What does it mean when something is scarce?

Resources

The factors of production that are used in the production of goods and services.

Multiple Select

Which of the following are things you think we use when we create goods and services?

• land

• labor

• machines

• tools

• new businesses

The 4 Factors of Production

• Natural - land, raw materials, etc.

• Human - people.

• Capital - machinery, tools, and buildings used to produce.

• Entrepreneurship - new business which combines other factors to make a profit.

Production...What are you Producing?

Production is the combining of human, natural, capital, and entrepreneurship resources to make goods or provide services. Available resources and consumer preferences determine what is produced.

Opportunity Cost

It is what is given up when a choice is made (the second-best alternative). Individuals must consider the value of what is given up when making a choice.

"An opportunity cost is an opportunity lost."

Poll

Opportunity Cost Example:

Bob has two hours of time after school before football practice. He has two things he could do during those hours:

A) Play his new PS5

B) Spend it studying for his Math test tomorrow

Which should he pick???

• Spend it playing his new PS5

• Study for his math test

Open Ended

What does Bob give up if he chooses to study for his math test?

Open Ended

What does Bob give up if he chooses to play his PS5?

Consumption

This is the using of goods and services. Consumer preferences and price determine what is purchased and consumed.