Download Economics - Redwood High School

Introduction to Economics
Welcome!
1) Take a Book (front of classroom)
2) Pick a desk carefully, it is for the entire semester!
ECONOMICS
The World & Resources
People
+
Why do we need Economics?
1) Resources are SCARCE
2) People have Unlimited Wants & Needs
FORCES:
3) Society to allocate resources
Formal Definition of Economics
• The social science of how society allocates scarce
resources among unlimited wants and needs.
The social sciences are academic disciplines which study the social life of human
groups & individuals
•
including economics, geography, history, political science, psychology & sociology
End of Day 1
• Economics is the social science of how a society allocates
their scarce resources among unlimited wants and needs.
Air versus Oil
There is NO Free Lunch
• Nothing is ever free in Economics
• People face Trade-offs in all decision making
• Decisions have :
– Opportunity Costs: what you give up
– Opportunity Benefits: what you gain
– Short Run and Long Run implications
Economic Decision Making
Opportunity Cost is the value of the next best alternative when
you make a decision.
Make decisions where the opportunity benefit > opportunity cost
You decide to
take 5 AP Classes
You put
little effort
into high
school
Opportunity Cost Worksheet
Trade-off Analysis
Should I go to college?
Opportunity Benefit
Opportunity Cost
Branches of Economics
• Microeconomics looks at individual parts of economy:
– How households & firms make decisions and interact in
specific markets
• Macroeconomics looks at the entire economy:
– Economy-wide phenomena including: inflation, unemployment,
interest rates & GDP (economic growth)
What is a Millenial?
Generation Y born between 1982-2000