Download What is Economics?

What is Economics?
Economics is….
• the study of how people make decisions in
a world where resources are limited.
• it is also the study of how things are made,
bought, sold and used.
2 Types of Economics
• Microeconomics:
“the small picture”.
(“micro” = small)
• decision making of individuals and
individual businesses.
2 Types of Economics
• Macroeconomics:
“the big picture”.
(“macro” = big)
• decision making by large units such as
governments or whole industries .
Let’s practice…
• Mr. and Mrs. Smith purchase a new T.V.
Microeconomics or Macroeconomics?
Microeconomics!
Let’s practice…
• The Federal Reserve cuts interest rates on
loans.
Microeconomics or Macroeconmics?
Macroeconomics!
Let’s practice…
Best Buy slashes prices on all T.V.’s 48” and
bigger.
Microeconomics or Macroeconomics?
Microeconomics!
Let’s practice…
• The airline industry asks the government
for financial help.
Microeconomics or Macroeconomics?
Macroeconomics!
What is an economic model?
• An economic model is a theory that tries to
explain human economic behavior.
Economic Systems…
• The way a country produces the things its
people want and need is called an
economic system.
• A country’s economic system determines
how basic economic decisions will be
made.
Any idea what the United States
economic system is called?
• The United States economic system is
called: Free Enterprise Capitalism
2 Major Economic Groups
• Producers: the individuals or groups that
make or provide goods and services.
• Consumers: the individuals or groups
that purchase and make use of the goods
and services that are produced.
In this unit we will explore…
• In this unit we will explore:
• Needs vs. Wants
• Scarcity
• Economic Decision Making
• Factors of Production
• Circular Flow of Economic Activity
• Factors that Promote Economic Growth
• Capitalism: History and Features