Introduction to Economics
What is Economics?

Study of choices people make to satisfy their
needs

How do we satisfy our needs?

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Producing, consuming, distributing, etc.
Economist are people who study these
choices

They research and observe how and why
people use their money

Familiarity, brand names, reputation, price,
trends, etc.
Which one do you prefer?


VS.
Which one do you prefer?


VS.
Which one do you prefer?


VS.
Microeconomics


Study of choices made by economic actor
(household, company, individual market)
EX. Nike's revenue stream from 2004-2013
Macroeconomics


Study of an entire economy
EX: Unemployment in the USA from 19602014
Decision Making

Consumers = Buyers


How do people decide what they want?
Producers = Sellers

How do companies decide what to sell?
Consumer Dilemma

Kristina is looking to buy a new car. She has
just recently graduated from college and has
got a job at a local grocery store. Annually,
she only makes roughly $23,000. Her parents
have offered to sell her their car, a 1999
Toyota Camry with only 60,000 miles on it for
$2,000. When she goes to a car dealership,
she sees the car of her dreams. A brand new
Audi A4 which cost around $35,000. If you
are Kristina, which car do you choose and
why?
Producer Dilemma

Tom and John decided that they wanted to
begin selling sweaters in school. Tom
believes that Red is the best color to sell,
while John believes that Blue is the best color
to sell. They have combined their savings into
one account and cannot find anyone else to
join them in their venture. What do they do?
Goods vs. Services

Goods are physical objects


Cars, basketballs, handbags, hamburgers
Services are actions or activities performed
for a fee

Teachers, lawyers, plumbers, cabs
Resources

We need things to make our goods and
services, so we look to Factors of Production

Natural Resources: Minerals, oil, land

Human Resources: clerks, priests, workers

Capital Resources: money, machines,
buildings, tools

Entrepreneurship: creating a new
resource/business and assuming all the
risks
How do we start a SUCCESSFUL
business?

Find what the people need


Scarcity: limited resources lead to a
DEMAND for products, thus businesses
must SUPPLY (or allocate) the good or
service
Figure our how to produce your good

Products must be produced efficiently (use
least amount while producing the most)


Division of Labor: split up work into many
jobs
Specialization: be an expert at a specific
task
How do we start a SUCCESSFUL
business? (cont...)

Who is going to buy our product?

Find a market for your good

A place where your good/service will be
demanded
Egg Cuber
Shoe Umbrella
Sauna Pants
Car Exhaust Grill
Yogurt Shampoo
Man Bra
Walking Sleeping Bag
Goldfish Walker
Privacy Scarf
Diet Water
Remote Rangler
DVD Rewinder
Lipstick Stencil
Toilet Golf