What is Economics?

What is Economics?

Why Study Economics?

Economics is simply
a social science that
focuses on the
choices people
make.

Multiple Choice

What is economics really about?

• money

• choices

• adulting

• education

Knowing about economics can help us understand WHY
people make the choices they do

★

Why do some people choose
not to go to college?

★

Why would someone buy a
more expensive product
when a lesser priced good is
available?

★

Why would someone drive to
Florida when they could fly?

Economic reasoning is everywhere, appropriate, and
always useful

★ It can be used by any age

group or culture, in any
situation or context.

★ The insights it provides are

powerful and can help you
make sense of the
confusing world around you.

Knowing about economics can help us unlock mysteries of
human behavior

★

Many mysteries can be solved by learning
how to identify incentives.

★

Incentives are rewards or punishments that
influence people’s actions.

★

When incentives change, people’s behavior
changes in predictable ways.

Multiple Choice

What are incentives?

• Your obligations to your job

• Giving your parents money for rent

• Rewards and punishments that influence your actions

• It sounds like insurance

Open Ended

Give an example of an incentive that would work for you

(ex. My incentive for working my job is getting a paycheck every two weeks)

By understanding economics, we can dispel common
myths and misconceptions.
★ Economics is all about institutions and

mathematical models

★ Economics is all about money
★ Bad choices have costs but good choices do

not

★ Sometimes people just have no choice

With economic knowledge, we can understand that
things are the way they are for a reason.
★ Why is the demand for Nintendo Wii’s so

great?

★ What is the price where the supply meets the

demand?

★ Why do so many people dislike monopolies,

but everyone seems to want to be one?

★ How can businesses stay in business when

they don’t earn a profit?

WHat is Scarcity?

A limited amount of
resources to meet
unlimited wants and

needs.

EVERYTHING is scarce!

Multiple Choice

What is scarcity?

• Being able to get everything you want, whenever you want

• Not getting anything you want at all

• A limited amount of resources to meet our unlimited wants and needs

Why do we have Scarcity?

We have Unlimited
Wants and Needs

But Limited Resources

Creates Scarcity…
So we need to make

Choices

Causes of Scarcity

1. Personal Perspective: your own feelings of
what is needed or wanted.

2. Poor Distribution of Resources: not using
your resources to their potential.

3. Rapid Increase in Demand: A sudden rush
to use resources can cause a shortage.

Open Ended

What is something you don't need to have but want it?

Ways we deal with Scarcity

1. Doing without something

2. Creating more resources

3. Making better use of our resources