Scenarios
For Spring Break my family said we were going to visit my cousins in Virginia. My friends also said they were going on a trip to the beach that exact same week. I cannot be in two places at once. I have to pick
Scarcity Forces Tradeoffs
Dirt
Yes! The world is using soil at an alarming rate and it is a finite resource!
Opportunity Cost
the loss of potential gain from other alternatives when one alternative is chosen.
Principle 1 of Economics States.....
Scarcity forces Tradeoffs
What does the P stand for in PACED
Problem
I ran a red light. I thought I got away with it, but two weeks later, I got a ticket because they had a stop light camera. Now I have to pay $300.
Future Consequences Count
Time
Yes, we can never make more time!
Scarcity
the state of being scarce or in short supply; shortage.
Principle 2 of Economics States
Cost Vs. Benefits
What does the A stand for in PACED
Alternatives
We had an old bookstore in town that went out of business because their prices were too high. Buyers were unhappy and stopped going.
Markets Coordinate Trade
Trees
Yes!
Trade-off
a balance achieved between two desirable but incompatible features; a compromise.
Principle 3 of Economics States
Thinking on the Margin
What does the C stand for in PACED
Criteria
My friend Doug is an excellent Barber. I know nothing about being a barber, but I’m a great doctor. Whenever I need a haircut, I can just go to Doug. Whenever he feels sick, he can call me to see what’s wrong.
Trade Makes People Better Off
Metals
Yes, some items are scarce.
Incentive
something that motivates a person to take a particular course of action.
Principle 4 of Economics States
Incentives Matter
What does the E stand for in PACED
Evaluate
Weightlifters are always taught to push themselves. They often think, “can I do one more?”
Incentives Matter
Fish
Fish are Scarce!
Benefits
what you gain from something in terms of money, time, experience, or other improvements in your situation.
Principle 5 of Economics States
Trade Makes People Better Off
What does the D stand for in PACED
Decide