Economics

• Exchange • Barter
To trade one thing for another. The exchange of goods or service
without money.

Example: I want to trade in my Example: I’ll give you my cake for

green disk for a blue one. your ice cream.
 Three Kinds of
Money

Cash Checks Credit Cards

 Needs vs. Wants
• Needs – what people • Wants – the things we
must have to live. would like to have,
Food but can live without.
Clothing
Shelter
 Economic Choice
You make an economic choice when you only have money
for certain items, not all.
Example:
I do not have enough money for both popcorn and a pretzel. I must
choose, so I buy the popcorn. That is my economic choice.

YUM!
 Opportunity Cost
Opportunity cost what you must give up
when you make an economic choice.
Example:
I chose the popcorn, so I have to give up the pretzel.
That is my opportunity cost.
 Supply and Demand
• Supply is the amount • Demand is what
of a good or service people are willing and
available. able to buy.

I would like to buy one candy cane, please .

 Scarcity - Sometimes there is not enough of
something to go around. That item is scarce.
The Ice
Cream
Singers

Oh no! Ice cream is scarce!

“I scream, you scream, we all scream

for ice cream! La, la, la, la, la!”
 What can I do with my money?
• Spend it

• Save it

• Invest it Give people money to use to

make more moneys, like in
stocks and bonds.
 Goods and Services
• Goods • Services
Three types of resources work together in our
economy

Natural Resources Human Resources

Capital Resources
Natural Resources are things we get from nature.

Oil Coal Trees

Water
Human resources are jobs done by humans at
work.
Capital resources are the machines, tools and
buildings needed to do a job.
 Producers

Producers make goods or provide services.

 Consumers
Consumers use or buy goods and services.
 Economic Specialization
Individuals or groups who concentrate on
one type of good or service.

Apple farmer Carpenter

 Interdependence
People need each other for goods and
services.

The Ancient Greeks traded their goods across the

Mediterranean Sea.