This document discusses key concepts in economics including scarcity, opportunity cost, and inflation. Scarcity refers to limited resources requiring people to make choices between alternatives. Opportunity cost is the loss incurred from choosing one alternative over another. Inflation is defined as a general rise in price levels such that goods cost more over time while wages often do not keep pace with inflation. The document also lists goals of the US government including general welfare, equity, safety, environmental protection, and economic security through policies like full employment, job training, and minimum wage tied to inflation.

1. Government Decision
Making

2. Economics
• The study of how people deal with meeting
unlimited wants and needs with limited
resources.
• Key Terms:
1.Scarcity
2.Opportunity Cost

3. Scarcity
• The idea that there aren’t enough
resources, time or energy to meet all the
needs.
• What forces us to make choices--A or B?
• Example:
• We don’t have enough time to play video
games and do homework.

4. Opportunity Cost
• A trade-off.
• What we lose when we choose to do one
thing instead of another.
• Examples:
• We go to the movies instead of going
bowling.

6. Goals of USA
• General welfare of people
• Equity - redistributing wealth in order to be fair.
• Safety and health
• Protect the environment
• maintain undeveloped land
• Economic security
• full employment / job training
• minimum wage to keep up with inflation

7. Inflation
• A rise in the price level
• Goods costs more today than they did
years ago
• Wages generally do not keep up with
inflation