Chapter One

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Chapter One

• What is Economics?

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1.1 An Economic Way of Thinking

• Economics study of choices people make to
  satisfy their needs wants
• Economist one who studies economic choices

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• Economics is in two categories
• MICROECONOMICS- studies the choices of individual
  economic actors (households, companies
  individual markets)
• MACROECONOMICS- examines entire economies
  (unemployment, inflation, GDP in the United
  States)
• ECONOMIC DECISION MAKERS
• CONSUMERS- decide what to buy
• PRODUCERS- choose what to provide how to
  provide it

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• Think of something that you get for free.
• How is this free good or service actually paid
  for?
• TINSTAAFL- Theres no such thing as a free
  lunch- someone has to pay for a supposedly
  free good.

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• Make a list of 15-20 resources that go into
  producing and providing lunch at NCHS.

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• GOODS- Physical objects that can be purchased
• SERVICES- actions or activities that are
  performed for a fee (lawyers, plumbers, etc.)

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• ECONOMIC RESOURCES
• Resource- anything people use to make or obtain
  what they need/want
• Factors of Production- (4) resources that can be
  used to produce goods and services
• 1.Natural resources (LAND)- items provided by
  nature that can be used to produce goods or
  provide services
• 2.Human resources (LABOR)- human effort exerted
  during production (can be physical or
  intellectual) (aka labor)
  

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• 3. Capital Resources (CAPITAL)- manufactured
  materials used to create products
• Technology- use of technical knowledge and
  methods to create new products or make existing
  products more efficiently
• 4.Entrepreneurship- the organizational abilities
  risk taking involved in starting a new business
  or introducing a new product
• the goal is to create something of value
• Entrepreneur- person who attempts to start a new
  business or introduce a new product- risking
  economic failure for the possibility of financial
  gain