Economics• Standard SS2E1 The student will explain that because of

scarcity, people must make choices and incur opportunity costs.

• Standard SS2E2 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 SS2E3 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 SS2E4 The student will describe the costs and benefits of personal spending and saving choices.

What is Barter?

• Exchange To trade one thing for another.

Example: I want to trade in my green disk for a blue one.

• BarterThe exchange of goods or service

without money.

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.

Oh no! Ice cream is scarce!

“I scream, you scream, we all scream for ice cream! La, la, la, la, la!”

The Ice Cream Singers

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

Producers make goods or provide services.

Consumers

Consumers use or buy goods and services.

Resources:

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