· Economics is about choices. It is not about money, money is about economics. A small piece of economics is about
money but you can refer to economics without discussing money.
- You can only make a choice between
Ex: you can sit in school and try to get your diploma or you
can go home and not get your diploma.
- You always have two choices:
alternative A or alternative B. You never have more. Your options always come down to those two alternatives. Some choices
come with consequences.
- You have limited resources and
unlimited wants and needs.
- Scarcity represents the next
- Oppurtunity cost is what you
- Ex: Your limited resource is
$1. Alternative A: Root Beer which costs $1 or Alternative B: Hot Dog which also costs $1
If you choose to buy the root beer it cost you the opportunity
to have a hot dog. The hot dog was the opportunity cost.
- Alternative B represents scarcity
because it’s the next best choice. Scarcity is considered the next best choice because you don’t have enough resources
to fit all of your needs. (Resources are things you use)
· Oppurtunity benefit is what you gain.
· The root beer was the opportunity benefit.
Needs or Wants
· A need is a necessity. A want is something that you choose to have or what you desire.
· A need most of the time is really a want.
Ex: Your mother may say she needs to go to the store but its
really a want. There won’t be any dier consequences if she doesn’t go to the store right then and there.
· An incentive is a way to help other people
Ex: Tickets : Since we know
we’re going to get a ticket , we choose to be on time and have our materials out and ready.