
The world is seen through scarcity and choice
Advise government policy
 Increase informed citizenship

› Unemployment, inflation, growth, taxation,
poverty, trade, regulation, education…

Business seeks
› Increased profit
› More informed decisions
*Not a vocational science; mainly academic*

Principles expressed as tendencies of
typical consumers, workers, or businesses

Foundations based on 2 facts:
1. Society’s economic wants (unlimited & insatiable)
2. Economic Resources (scarcity)

4 factors
› Land
› Labor
› Capital
› Entrepreneurial
ability

Land: Forests, mineral, oil, water…

Capital:
› All manufactured
aids used in
production
› Tools, machinery,
equipment, factory,
storage,
transportation…

Labor: all physical and mental talents of individuals

Entrepreneurial Ability
› Takes Initiative, driving force behind production
› Strategic business decisions
› Innovator
› Risk bearer
 All
resources
experience
different levels
of scarcity

Opportunity costs
› What you sacrifice for another item or
service

Fry has one free hour to
practice the holophonor
for an upcoming recital or
work at Planet Express for
$10 per hour or babysit
Nibbler for $15 per hour.
He chooses to practice the
holophonor. What is the
opportunity cost of
practicing the holophonor?
The opportunity cost would be $15 because it would be the most profitable
alternative.

Marginal Analysis
› Marginal Benefits vs. Marginal Costs
 Example: (MC) Large the engagement ring
(More $) = (MB)Less $ for future)

Impatience leads to spending over saving
› Purchase dissatisfaction
› Buyer beware!

Freedom of choice
› Enables owners to employ or dispose their
property and money as they see fit
› Allows workers to enter any line of work

Economic Efficiency
› Maximum fulfillment of wants

Economic Security
› Provide for those who unable to earn minimal
levels of income (Sick, disabled, aged, laid off)

Growth
› Develop a higher standard of living
 Price
Stability
› Inflation and deflation

Full Employment
› Jobs for those willing and able to work

The irregular fluctuations in economic activity
 All
resources
experienc
e different
levels of
scarcity

Opportunity costs
› What you sacrifice for another item or
service

Fry has one free hour to
practice the holophonor
for an upcoming recital or
work at Planet Express for
$10 per hour or babysit
Nibbler for $15 per hour.
He chooses to practice the
holophonor. What is the
opportunity cost of
practicing the holophonor?
The opportunity cost would be $15 because it would be the most profitable
alternative.

Marginal Analysis
› Marginal Benefits vs. Marginal Costs
 Example: (MC) Large the engagement
ring (More $) = (MB)Less $ for future)

Impatience leads to spending over saving
› Purchase dissatisfaction
› Buyer beware!
 Bias
› Better economies avoid biased

Loaded Terminology
› Incorporation of emotion to misuse of definitions to
confuse non-economic minded folk

Post Hoc Fallacy
› The belief that one event caused result
› Example: New coach, better record; better record due to new
coach
Syllabus
Signature page (must be signed by you
and your parents to get credit for this)
Introduction Sheet (your info plus
something interesting about you and the
two questions about the class)
Chapter 1 notes
Economics is Life Activity
Chapter 1 Questions (what you worked on
today)
1.
2.
3.
4.
5.
6.
›
This is the only item that does not have to be
completed during the notebook check on
Wednesday. You will continue working on this
while I check notebooks.