Economics and personal finance ALL MODULES

Intended consequences

outcomes or results that we expect when a choice is made.

Microeconomics

the study of how individuals, households, and businesses make choices

Macroeconomics

the study of the economy as a whole; economics assumes that individuals are rational and self-interested

Opportunity cost

the value of the next best alternative other than the choice that was made. it can include money, time, or experiences

The unemployment rate is the number of unemployed people in a country divided by the labor force and multiplied by 100 to convert to a percentage. Given that the unemployment rate does not include part-time workers or discouraged workers, the results can be misleading. There are four main types of unemployment: frictional, structural, cyclical, and seasonal.

unemployment rate= {(number of people unemployed)/(number of people in labor force)} x100

Unintended consequences

unexpected outcomes that arise due to a choice Unintended consequences can be positive when they result in unexpected benefits. Unintended consequences can be negative when they cause unexpected harm.

Choices made by individuals, businesses, and governments may have ___________ consequences.

unintended

economic models

(are to) help understand concepts and real world date; environmentalist often use economic models

An economic model is a simplified representation of an economic enviroment

(similar to a graph)

Scarcity

-The reason we must make choices (forces us to) -the condition that exists when there are not enough resources to satisfy all of the competing uses (Understanding the opportunity cost of choices can help you make better decisions that are not always obvious)

Economics

-The study of how individuals and societies make choices under the condition of scarcity -explores choices made by individuals, households, businesses, and government

When does a Trade-off occur?

A trade-off occurs when you give something up, to gain something else.

2 subsets of economics

Microeconomics and Macroeconomics

The PACED decision-making model, a five-step procedure that provides a structure for making decisions and evaluates options before making a decision.

P- Problem (state the problem) A- Alternatives (list the alternatives) C-Criteria (list the criteria) E-Evaluate (Evaluate the alternatives using the criteria) D- Decision (make a decision)ay

Resources

Things we use to produce goods and services including land, labor, and capital