Economics Brainhoney

- 1.02- Economics is the study of how people get the goods and services they need and want
o Macro vs Micro
- Three Questions:
o What will be produced?
o How will it be produced?
o For whom will it be produced?
- 1.03- Tradeoffs
o Scarcity compels us to make choices- there is only so many resources available
o Opportunity cost- what did you have to give up to obtain what you have?
- 1.04- Demand
o when the price of a good or service increases, the amount people will buythe quantity
demandedwill decrease.
o Common Cents- try to apply common sense when dealing with the economy
o TRIBE- Tastes and preferences, Related goods and services, Income, Buyers,
Expectations of price- these all impact demand
- 1.05- Supply will decrease with price decreasing- suppliers will produce more when price rises
on a product
o Left is less. Right is more.
o ROTTEN- Resource, Opportunity cost, Taxes, Technology/productivity, Expectations,
Number available- these all impact supply
o price goes along the y-axis and quantity is on the x-axis.
- 1.06- Soap Opera of Supply and Demand
o Factors other than price will shift the whole supply or demand curve. Price only creates
a change in quantity demanded or quantity supplied.
o Equilibrium Point- Point where supply and demand meet
o price is determined by the interaction between supply and demand.
o If suppliers charge a price higher than equilibrium, a surplus will result. If they charge
less than equilibrium, a shortage will result.
- 1.07- The Green and how it works
o Medium of Exchange- Money accepted in exchange of another item- candy bar for .50
o Measure of Value-Money used to describe worth of item
o Standard- all money is equal relatively speaking- a dollar is a dollar- whether in
pennies or bills
o Store of Value- Money holds value- a year from now a dollar is a dollar
Money is a matter of functions four
a medium, a measure, a standard, a store.
o To slow this trend, the U.S. government abandoned the gold standard
o Fiat currency like U.S. currency, is money the government declares legal for use in
payment.
o Money, even currency, is subject to the same rules. If there is too much supply, the
value goes down.- Germany
- Module 1: Questions to Ponder:
o What is economics and how does it affect me?
o How does scarcity force us to make choices?
o Can we measure the "cost" of our choices?
o How does supply and demand inform the choices of consumers and business owners?
Why is studying supply and demand useful?
o What factors affect supply and demand?
o How are prices determined?
o What is "money"?
o What gives money its value?
o Why can't we just print more currency to solve financial problems?
- What are three things you did not know before studying this module?
- What are two things you learned that related to your life?
- Is there anything you still feel confused about? Do you have any questions for your
instructor?
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