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Personal Finance Basic Economic Principles
Needs – things that are necessary for survival FOOD CLOTHES HOUSING
Wants – things not necessary for survival but that add comfort  and pleasure to our lives
<ul><li>Goods (also known as products) – things you can see and touch. </li></ul><ul><li>Examples? </li></ul>
<ul><li>Personal resources – time, money, skills we use to satisfy our wants </li></ul><ul><li>Economic resources – the me...
<ul><li>Human resources  (also called labor) - </li></ul><ul><li>people who work to produce goods and services. </li></ul>...
The basic economic problem is SCARCITY This means we have limited resources but unlimited wants.
<ul><li>You have to make a choice.  You have $20 and have been invited to a movie with a friend but you also want to buy a...
Decision-Making Process PACED Method <ul><li>Identify  P roblem. </li></ul><ul><li>List  A lternatives (choices). </li></u...
 
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Personal Finance Basic Economic Principles

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Basic economic principles

Published in: Economy & Finance, Technology

Personal Finance Basic Economic Principles

  1. 1. Personal Finance Basic Economic Principles
  2. 2. Needs – things that are necessary for survival FOOD CLOTHES HOUSING
  3. 3. Wants – things not necessary for survival but that add comfort and pleasure to our lives
  4. 4. <ul><li>Goods (also known as products) – things you can see and touch. </li></ul><ul><li>Examples? </li></ul>
  5. 5. <ul><li>Personal resources – time, money, skills we use to satisfy our wants </li></ul><ul><li>Economic resources – the means through which goods and services are produced </li></ul><ul><li>Natural resources – raw materials supplied by nature </li></ul>
  6. 6. <ul><li>Human resources (also called labor) - </li></ul><ul><li>people who work to produce goods and services. </li></ul><ul><li>Capital resources (or capital) – the tools, equipment, and buildings that are used to produce goods and services </li></ul>
  7. 7. The basic economic problem is SCARCITY This means we have limited resources but unlimited wants.
  8. 8. <ul><li>You have to make a choice. You have $20 and have been invited to a movie with a friend but you also want to buy a new cd of your favorite group. You are also trying to save for ski trip during Christmas break. </li></ul><ul><li>What do you do? </li></ul><ul><li>Opportunity Cost: </li></ul><ul><li>The next best alternative – what a person gives up to get something. </li></ul>
  9. 9. Decision-Making Process PACED Method <ul><li>Identify P roblem. </li></ul><ul><li>List A lternatives (choices). </li></ul><ul><li>Select the C riteria that is most important to consider. </li></ul><ul><li>E valuate the options compared to the criteria. </li></ul><ul><li>Make a D ecision. </li></ul>

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