INTRO TO

ECONOMICS
MS. GARCHA
SOCIAL STUDIES
 YOU DO NOT HAVE ENOUGH $$$ TO DO BOTH AND YOU MUST
CHOOSE AN OPTION WHICH DO YOU DO?
1) Buy a pair of shoes that you really want or pay back your friend?
2) Buy a Christmas gift for your sibling or your friend both have gotten you a gift
3) Buy a new laptop or buy a new cellphone
4) Buy tickets to a concert you really want to go to or pay back your parents
5)Go on a shopping spree right before school starts or save for a car when you have your license
6) Go on a shopping spree right before school starts or save for a car when you dont have your L
7) Go to New York City for $1000 (hotel & flight) for 5 days or Mexico for 7 days all inclusive for $1500
8) For the same price, do you purchase 10 new video games or 15 used video games, which all may
not work
9) Buy a musical instrument or buy a piece of sporting equipment both are the same price
hypothetically
10) Buy tickets for the fast pass line at Disneyworld for an additional $50 after youve already spent
$105 on your entrance into the amusement park or wait in 1-2 hour lines up to see attractions/go on
rides
YOU JUST EXPERIENCED THE BIGGEST PROBLEM IN ECONOMIC DECISION MAKING - SCARCITY

- Economics is about deciding how to meet the needs and desires

of individuals, businesses, and nations
- Economics studies the production, exchange, & consumption of
goods and services
(Goods: products that can be sold)
(Services: a system of supplying a public want/ need ex. Banking,
transportation)
- Scarcity issue: A societys needs and desires often exceed its
resources, so it has to be decided on how the resources will be
used
- Economic policy making is driven by governments balancing
needs with resources
 IN SIMPLER TERMS, ECONOMICS IS:

1. The study of the production, exchange,

and consumption of goods & services
2. The decisions we make in relation to
meeting the basic needs of individuals,
businesses, & countries
The question of Abundance vs. Scarcity
 MACROECONOMICS VS MICROECONOMICS
Macroeconomics study economic activity on a national/global scale.
They discover economic patterns through studying statistics including
Gross Domestic Product, Gross National Product, unemployment rates and
consumer price indexes
Gross Domestic Product GDP: total vale of goods and services provided in
a country, even if the foods and services are produced by a foreign owned
company within a time frame, ex. A year
Gross National Product GNP: Measures the total market value of all goods
and services produced by the nations companies even if the companies
are located in other countries
GDP & GNP show how the total value of goods & services has grown or
declined & indicate how strong a countrys economy is
GDP & GNP tell us about trends and can be compared to the business
cycle (ups & downs of an economy) & predictions can be made about
where the economy is going
MAC R OE C ONOMIC S V S MICR OE C ONOMIC S

Microeconomics Studies the economic behavior of

individual units of an economy (person, household, firm, or
industry)
Primarily concerned with the factors that affect individual
economic choices, the effect of changes in these factors on
the individual decision makers, how their choices are
coordinated by markets, and how prices and demand are
determined in individual markets.
Ex. How many workers should be hired to maximize profit?
Ex. What is better a gas tax or fuel efficiency to fight climate
change?
Ex. When is the best time to release our companys product?
CRASH COURSE INTRO TO ECON!

https://
www.youtube.com/watch?v=3ez10ADR_gM&list=PL8dPuuaLjXtPNZwz5_
o_5uirJ8gQXnhEO
 THE LAWS OF SUPPLY & DEMAND
Canadas economy is always affected by prices Canada sets for goods and services in the
world market
When the prices paid for Canadian exports are high, the economy booms (high)
Resource based industries of western Canada benefit from increased demand and high
prices for goods such as grains, oil, natural gas, coal, and other minerals
When global prices decrease, demand goes down = economy dips
Laws of supply & demand: economic laws about the relationship between the available
amount of a product (supply), the # of people who want the product (demand), and the
price of the product
 LAWS OF SUPPLY & DEMAND REITERATED

Supply: the producers in the economy drive the supply part of the
relationship
- prices high = producers increase production
- prices low = producers cut back on production

Demand: the consumer side of the relationship (YOU)

- when prices for service/product go down = demand goes up
- when the price increases = the demand falls
EXAMPLES OF LAW & DEMAND

Ex. Coffee- crop failure in Central America would lead to a worldwide

shortage in coffee beans
If the demand remains the same, there would be am increase in the
price of coffee
Ex. Clothing stores put winter stock on sale in February to make
room for their new Spring line.
Spring line is full price and Winter line is all marked down
CRASH COURSE LAW OF SUPPLY & DEMAND

https://
www.youtube.com/watch?v=g9aDizJpd_s&list=PL8dPuuaLjXtPNZwz5_o
_5uirJ8gQXnhEO&index=4
 TASK

Demand for a product can be increased through marketing and

advertising.
Find an advertisement & discuss how the advertisement could
affect your choices as a consumer. Ask the person you are
talking to, if they would be enticed to buy the product that
the advertisement is selling, why/ why not
Ex. A Kanye West fan might be enticed to spend a few hundred dollars
on a pair of Yeezys because they associate him with the brand.
You will present your advertisement in an inside outside circle, where
you are talking about your advertisement to one person at a time