What is Economics?

Economics is

a way of thinking

Economics

the study of how people choose to use their limited resources to satisfy their unlimited wants

Wants

Basic requirements for survival(“needs”) as well as things one desires that are not required for survival

Resources

Things you use to satisfy your wants

Scarcity

Fundamental Economic Problem

• When our wants are greater than the resources that are available to satisfy them

Windfall

Money randomly coming into your possession

Economics is all about studying the _____ that people have to make as a result of scarcity

choices

Examples of how scarcity forces choices

You want a phone and an IPAD, but can only buy one

Positive Economics

Describes how things are and why, talking about how economies work

• How unemployment rate over time has increased after the pandemic hitting the United States

Normative Economics

A solution for people and the government based on specific criteria, involved in making policies

• Economists reccomend the US government to stop relying on massive exports and instead make stuff in the country

Economics is about…

Analyzing how economies work

Teaching better decision making decision-making

Making policy recommendations

Studying how people use limited resources to satisfy their unlimited wants