The study of how people seek to satisfy their needs and wants by making choices Relationship between Economics and Scarcity What is Scarcity What is Scarcity Economic situation where there are ID: 1027439
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1. What is Economics?
2. What is Economics?The study of how people seek to satisfy their needs and wants by making choices
3. Relationship between Economics and Scarcity
4. What is “Scarcity?”
5. What is Scarcity?”Economic situation where there are limited quantities of resources to meet unlimited wants and needs.
6. What is a “Shortage?”
7. What is a “Shortage?”Economic situation in which a good or service(quantity) supplied is less than the quantity demanded at a given price.
8. What are “needs?”
9. What are ”needs?”Things NECESSARY for survival
10. What are “wants?”
11. What are “wants?”Things we desire but are NOT ESSENTIAL to survival
12. What is the “Paradox of Value?”
13. What is the “Paradox of Value?”Apparent contradiction between the high value of a nonessential item and the low value of an essential item
14. Paradox of Value
15. Marginal Utility is the additional satisfaction a consumer gains from consuming one more unit of a good or service. Marginal utility is an important economic concept because economists use it to determine how much of an item a consumer will buy. Positive marginal utility is when the consumption of an additional item increases the total utility. Negative marginal utility is when the consumption of an additional item decreases the total utility.
16. What is “Opportunity Cost?”
17. What is “Opportunity Cost?”Cost of the next best alternative use of money, time, or resources when one choice is made rather than the other.
18. What is “Trade offs?”
19. What is “Trade offs?”Trade offs is defined as the alternative that you must give up when your choice is made over the other.
20. Factors of ProductionLandLaborCapitalEntrepreneursRemember these!You will hear them a lot this semester!
21. LandNatural resources (land, coal, water, forests, etc.)
22. LaborThe effort people devote to a task for which they are paid
23. CapitalPhysical: Human made objects used to create other goods and services
24. Entrepreneurs(Risk Takers)Ambitious leaders who combine land, labor, and capital to create and market new goods and services.(Shark Tank)
25. Factors of Production
26. Process of Production
27. Production Possibilities Curves A curve depicting all maximum output possibilities for two goods, given a set of inputs consisting of resources and other factors.
28. CoffeeTea5050Al's Coffee Shop!
29. CoffeeTea5050Al's Coffee Shop!Any production in thisspace is inefficient…youhave the suppliesbut aren’t makingthe coffee or tea
30. EfficiencyEfficiency means using resources in such a way as to maximize the production of goods and services. An economy producing output levels on the production possibilities frontier is operating efficiently.
31. CoffeeTea5050Al's Coffee Shop!Any production alongthis line is EFFICIENT
32. GrowthGrowth If more resources become available, or if technology improves, an economy can increase its level of output and grow. When this happens, the entire production possibilities curve “shifts to the right.”
33. CoffeeTea5050Al's Coffee Shop!Al gets a loan from The bank and nowHe can make evenMore coffee or tea!