Economic Decision Making

Thursday January 31, 2013 – Periods 2, 3, 6, 7

Cost-Benefits Analysis Balance

Because of scarcity, people must make choices about how they will use their resources.  Choices are explained in terms of trade-offs, or alternatives that are available whenever a decision is made. A trade-off is exchanging one thing for another. The cost of every decision is measured in terms of its opportunity cost, which is the cost of the next best alternative use of money, time, or resources when one choice is made rather than another.

42l

Advertisements

Economic Way of Thinking

Wednesday January 30, 2013 – Periods 2, 3, 6, 7

Handy Dandy Guide To the Economic Way of Thinking.
Economics is a system for making choices.

  1. People economize. People choose the alternative which seems best to them because it involves the least cost and greatest benefit.
  2. All choices involve cost. Cost is the second best choice people give up when they make their best choice.
  3. People respond to incentives. Incentives are actions or rewards that encourage people to act. When incentives change, people’s behavior changes in predictable ways.
  4. Economics systems influence individual choices and incentives. How people cooperate is governed by written and unwritten rules. As rules change, incentives change and behavior changes.
  5. Voluntary trade creates wealth. People can produce more in less time by concentrating on what they do best. The surplus goods or services they produce can be traded to obtain other valuable goods or services.
  6. The consequences of choices lie in the future. The important costs and benefits in economic decision making are those which will appear in the future. Economics stresses making decisions about the future because it is only the future that we can influence. We cannot influence things that have happened in the past.

42l

What Is Economics

Tuesday January 28, 2013 – Periods 2, 3, 6, 7

scarcity

Today we learned that economics is a social science that deals with the fundamental economic problem of scarcity—a condition caused by the combination of seemingly unlimited wants and limited resources. Because of this, people are forced to make choices and decisions about how they will use their resources. There is a significant difference between needs and wants. Individuals have basic essential needs to survive: food, clothing, shelter. Everything else is considered a want, which means not essential to survive. Throughout history, scarcity has prevented people from satisfying all their needs and wants. Scarcity means that people do not and cannot have enough income and time to satisfy their every want; therefore, people are forced to make choices about how they will use their resources. The notion of TINSTAAFL, which stands for There Is No Such Thing As A Free Lunch, is often used to remind us that resources are scarce and that we must make careful economic decisions regarding what, how, and for whom to produce.

42l

what-is-economics

42l

Semester Exam

Friday January 25, 2013 – Periods 6 & 7

exams1-1mde9io

42l

Semester Exam

Wednesday January 23, 2013 – Period 3

Semester Exam Scream

42l

 

Semester Exam

Tuesday January 22, 2013 – Period 2

rman

42l