Economics Standard SS 2 E 1 The

Economics • Standard SS 2 E 1 The student will explain that because of scarcity, people must make choices and incur opportunity costs. • Standard SS 2 E 2 The student will identify ways in which goods and services are allocated (by price; majority rule; contests; force; sharing; lottery; command; first-come, first-served; personal characteristics; and others). • Standard SS 2 E 3 The student will explain that people usually use money to obtain the goods and services they want and explain how money makes trade easier than barter. • Standard SS 2 E 4 The student will describe the costs and benefits of personal spending and saving choices.

What is Barter? • Exchange • Barter To trade one thing for another. The exchange of goods or service without money. Example: I want to trade in my green disk for a blue one. Example: I’ll give you my cake for your ice cream.

Three Kinds of Money Cash Checks Credit Cards

Needs vs. Wants • Needs – what people must have to live. Food Clothing Shelter • Wants – the things we would like to have, but can live without.

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 of a good or service available. • Demand is what people are willing and 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!”

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

Producers make goods or provide services.

Consumers use or buy goods and services.

Resources: • Resources - All natural, human, and human-made items to produce goods and services.