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Hi! My name is Stan and today I am going to teach you about economics. Economics is the study of the making, buying, and selling of goods or services. What does barter mean? These days people usually use money to get what they want. Before there was money, people had to barter to get what they wanted. To barter means “to trade”. Some people were good hunters, some were craftsmen, and some were farmers. One person might have traded five rabbits for milk and eggs. Eventually people wanted something smaller to carry around as money. People started using coins, as well as paper money for trade. Want to trade with me? Yesterday, when I was walking through town, I decided to go to “Bubba’s Ice Cream”. My friend Diana works there. Diana provides a service to me because she serves me ice cream. A service is any kind of work performed for others. The ice cream is a good. A good is something you can feel, or any kind of merchandise. Bubba’s Ice Cream Look at the pictures on the right. Which of these pictures show goods and which ones show services? 1) 2) 3) 4) I asked Diana for a double scoop of my favorite kind of ice cream: mint chocolate chip. “I am sorry Stan, we are all out of that flavor”, she said. Disappointed, I settled for vanilla. I’m sorry Stan! What is supply and demand? The supply of mint chocolate chip ice cream at “Bubba’s” was gone because it was in high demand (wanted) by many customers. Look at the chart on the left to see what flavors are in supply at “Bubba’s Ice Cream”. Diana asked me if I would like my vanilla ice cream in a cup or a cone. I asked for a cone. Diana said I was lucky because there was only one more cone available. The little boy behind me in line wailed, “I wanted my ice cream in a cone!” I told Diana that he could have the last cone, and that I would have mine in a dish with chocolate syrup. There was a scarcity of cones at Bubba’s. Scarcity means that there are limited resources, and therefore, people must make cho
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