WHY ECONOMICS?

Mrs. Sarah A. EismaPSHS-MC

At the end of the lesson: Define what Economics is. Explain the importance of

Economics as a required course.

ACTIVITY 1 People often want (or value) things

they don't possess. Make a 'wish list' of ten things you would like to have. Beside each item mark whether you think each one is a need or a want. Compare your list to that of a partner and then of another person. List items you think most members of the class want. Write yes or no next to the items on your list.

ACTIVITY 2 Imagine you were going to spend

three months camping on a tropical island with no services and were allowed to take ten items with you. List the ten items. Compare this list to the list generated in the above activity. Which list has more needs? Can you explain why? Are there any items all members of the class would take?

ACTIVITY 3 Extra activity (Homework) If you have a part-time job or

receive pocket money explain how you prioritise the ways in which you will or would like to spend the money. List the ways in which you spend your money (or intend to spend it) and state whether that expenditure is for a need or a want.

What is Economics? From the Greek word “oikonomus” =

“household management” What are we to manage in the

household? Why is there a need to manage the

household? Limited resources to meet unlimited needs

and wants.

According to Economists Paul Samuelson:“study of how societies

choose to use scarce productive resources that have alternative

uses, to produce commodities of

various kinds, and to distribute them among different

groups.”

Gerardo Sicat:“the study of how

individuals and society in general make choices that involve the use of scarce resources

from among alternative wants that need to be

satisfied.”

What is common in these definitions? “Goods are scarce and that society

must allocate its resources efficiently.”

3 key ideas1. SCARCE : not enough resources to satisfy all

the demands of the people.2. EFFICIENT: absence of waste/ using the

economy’s resources as effectively as possible to satisfy people’s needs and desires.

1. ALLOCATE: process of choosing among competing ends which resources are going to be employed for the production of commodities chosen to satisfy human needs and wants that have a higher value in the priority system.

ECONOMICS and CHOICESWhy do we make choices? Is it hard to make choices?

Insatiability-Scarcity Conflict Insatiability vs. Scarcity

ECONOMICS and CHOICES Insatiable: always wanting more;

not able to be satisfied; incapable of being satisfied; quenchless

Scarcity: very small in amount or number; not plentiful; deficient in quantity or number compared with the demand.

ECONOMICS and CHOICES

ECONOMICS and CHOICES NEEDS vs. WANTS

ECONOMICS and CHOICES NEEDS vs. WANTS

ECONOMICS and CHOICES NEEDS vs. WANTS

ECONOMICS and CHOICES CONTENTMENT: Curbing

Insatiability and living with scarcityThe state of being happy and

satisfied STEWARD: using wisely and well

the resources entrusted to us.A person whose job is to manage the

land and property of another person.

THE COST OF CHOICE ECONOMIC COST: value people

place on a good or service, and that value, in turn, helps to determine the price of the good and service. GOOD: tangible (physical) thing that has a

measurable life span. SERVICE: intangible items; consumed at

the same time it is produced

THE COST OF CHOICE Economic goods/services: those

goods/services that bear a positive economic cost

Nuisance goods: goods that a consumer pays to have it removed and are said to bear a negative economic cost. (ex. Discarded cardboard containers, used paper towels, broken toys, etc.)

Recycling: turning various nuisance goods into economic goods and services.

THE COST OF CHOICE Free goods/services: goods/services with a

zero (0) price tag. As free goods become more scarce, they become

economic goods Ex. Diamond-water paradox or value paradox Water is necessary to sustain life. Diamonds are mere ornamentation. But getting enough water to sustain life typically has a low price, while a piece of diamond jewelry hasa high price.

Importance of Economics in Nation-Building

Gains a better understanding of what needs to be done more efficiently

Making sound decisions at all levels—from individual to societal.

Teaches ways toward obtaining more from limited resources

Importance of Studying Economics It affects your everyday life Helps you make more informed

decisions. Makes you a more effective citizen. Economics is important to me because

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