Unit 2 - Economic Essentials

Learning Target 1 : I can explain what economics is

The Rolling Stones said it best.  "You can’t always get what you want, but if you try some time, you get what you need." Think about it, do you have everything you want?  Most of us will answer that question with a no. Why is that?  Well the answer is simple, we all have limited resources for unlimited wants and needs.  This is the concept of scarcity and economics is the study of scarcity, how people use those resources, and the decision making that goes with unlimited needs and wants with limited resources.  Economics can help us understand historical trends, make predictions for the future and give us a better understanding of the headlines in today’s newspaper. 

The study of economics goes well beyond you as person and can expand out to the way a county operates.  For this chapter we are going to stay at the micro level and focus on businesses.  One of the main concepts of economics is that of incentives.  People are motivated by certain things which will ultimately change their behavior or thoughts.  Businesses offer incentives to you so in return you will visit their website, sign up for their newsletter, go to their store or hopefully even purchase a product or two. 

The incentive the businesses have revolve around the number one goal of all businesses and that is profit.  Businesses also have unlimited wants such as building a new retail branch in a part of the city that is booming but they may not have enough cash to fund this project.  A business may want to hire more employees but does not have the sales to cover the costs associated with those new employees.  This is just the tip of the ice berg of what economics studies. 

Let’s watch this video to dig a little deeper on what economics is.

​As you can see economics shapes the world.  By using economics you can be become a wiser consumer, a better business person and ultimately make more informed decisions while you maximize all of your resources. 

Make The Connection:  Develop a list of 10 hypothetical scarcity situations a business may encounter

Example:  Unlimited need - Hire more employee’s               limited resources - not enough revenue to justify

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