1. Economic environment. Economic goods and services.

Today’s world is very complex. The understanding of economics will influence how you earn a living and help make better economic decisions.

Before people start school, they make 2 very important economic discoveries. They find that there is a big gap between what they want and what they can have.

Later, they settle into two major economic roles: consumer and producer. In the role of the consumer, a person buys goods and services for personal use, not for resale.

Consumer goods are products, such as food, clothing, and cars, that satisfy people’s economic needs or wants. Sooner or later consumer goods are used up.

Services are actions, they are used up at the time they are provided.

A producer makes the goods or provides the services that consumers use.

In order to produce something a person must have right resources. Resources are the materials from which goods and services are made. There are three kinds of resources: human (people), natural (raw materials), and capital resources (capital, or the money or property).

Human wants tend to be unlimited, but resources are limited. There is a scarcity of resources. Scarcity is the situation that exists when demand is greater than supply.

There are basic economic problems: What goods and services will be produced? How will they be produced? Who will get them? How much will be produced for now and how much for the future? The answers to the questions depend on a country’s resources, and also on its customs and values.

- Your understanding of economics will influence how you earn a living and help you make better economic decisions.

- There is a big gap between what you want and what you can have.

- There are 2 major economic roles: consumer and producer. In the role of the consumer, a person buys goods and services for personal use, not for resale. A producer makes the goods or provides the services that consumers use.

- Consumer goods are products, such as food, clothing, and cars, that satisfy people’s economic needs.

- Resources are the materials from which goods and services are made. There are three kinds of resources: human (people), natural (raw materials), and capital resources (capital, or the money or property).

- Human wants tend to be unlimited, but human, natural and capital resources are, unfortunately, limited.

- In the market systems, competition answers the basic questions of what, how, for whom and how much.

2. Costs of production. Opportunity costs. Tradeoffs.

Opportunities are chances to improve situation. However, they may cost you something.

All production involves a cost. This cost is counted in terms of money and in terms of resources used. The various resources used in producing a good or a service are the real costs of that product.

Since resources are limited and human wants are unlimited, people and societies must make choices about what they want most. Each choice involves costs. The value of time, money, goods and services given up in making a choice is called opportunity cost.

When people make a choice between two possible uses of their resources, they are making a tradeoff between them.

To make choices that best satisfy human wants, people must be aware of all the tradeoffs. Then society can make the decision that best fits its values and goals.

One of the most important choices a society makes is between producing capital goods and producing consumer goods. If a nation increases its production of consumer goods, its people will better lives today. However, if a nation increases its production of capital goods, its people may live better in the future.

Society must decide what it wants and what it is willing to give to get it. The same applies to individual. Since every economic decision requires a choice, economics is a study of tradeoffs. When you analyze each side of a tradeoff, you can make better decisions.

- Opportunities are chances to improve your situation.

-Opportunity cost = lost of one of the results of variants of the choice

- When people make a choice between two possible uses of their resources, they are making a tradeoff between them.

- One of the most important choices a society makes is between producing capital goods and producing consumer goods.

- One of the most important choices a society makes is between producing capital goods(living good in the future) and producing consumer goods(living good today).

- When you analyze each side of a tradeoff, you can make better decisions.