Lesson One

Economics

·        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.

Time

• You can only make a choice between two things.

Ex: you can sit in school and try to get your diploma or you can go home and not get your diploma.

Choices

• 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.

Scarcity

• You have limited resources and unlimited wants and needs.
• Scarcity represents the next best choice.

Oppurtunity Cost

• Oppurtunity cost is what you lose
• 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

·        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.

Incentive

·        An incentive is a way to help other people make choices.

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.