American Economic Experience 8/18 EQ: What will I need to be successful in

this class?

Bell Work: Sit at your desk from yesterday I’ll give you anything you want other

than money. Create a list of items that you want?

I Will: begin to think like an economist.

What WPHS and I Expect of You

1.Be Prompt

2.Be Prepared

3.Be Polite

1. Be NICE***

4.Be Productive

Class Procedures

• School wide alert signal

• Sign out

• Tardy log

• Dismissal procedures

Material Needed One pocket folder or 3-ring notebook

with dividers Blue or black ink pens Pencils Loose leaf paper

Absences and Make-Up

It is your responsibility to get all missed class work and make arrangements to take missed quizzes or tests.

ALL make-up work must be returned within 3 days following the absence.

Grading Weighted Categories: Tests/ Projects: 40% Assignments: 30% Quizzes: 20% Homework: 10%

Fire Drill Out the door to the right

Across the track

Bell Work: I’ll give you anything you want

other than money. What do you want?

Would your list ever end? Why not?

Scarcity!!!

What is Economics? Economics is the science of scarcity.

Scarcity means that we have unlimited wants but limited resources.

Since we are unable to have everything we desire, we must make choices on how we will use our resources. Economics is the study of choices

Definition

Economics- Social science concerned with the efficient use of scarce resources to achieve maximum satisfaction of economic wants.

(Study of how individuals and societies deal with Scarcity)

Examples: You must choose between

buying jeans or buying shoes.

Businesses must choose how many people to hire

Governments must choose how much to spend on welfare.

In economics we will study the choices of individuals, firms, and governments.

5 Key Economic Assumptions

1. Society’s wants are unlimited, but ALL resources are limited (scarcity).

2. Due to scarcity, choices must be made. Every choice has a cost (a trade-off).

3. Everyone’s goal is to make choices that maximize their satisfaction. Everyone acts in their own “self-interest.”

5 Key Economic Assumptions

4. Everyone makes decisions by comparing the marginal costs and marginal benefits of every choice.

5. Real-life situations can be explained and analyzed through simplified models and graphs.

Do you think Like an Economist? In order for something to be scarce it

must be limited and desirable

Textbook Be sure to get a Principles of Economics

book to take home

American Economic Experience 8/19

Bell Work: Finish your “Think Like an Economist” activity from yesterday.

In order for something to be scarce it must be limited and desirable

American Economic Experience 8/20

Bell Work: What does it mean for an item to be scarce?

What is the difference between trade-offs and opportunity cost?

Scarcity

Scarcity means that we have unlimited wants but limited resources.

Since we are unable to have everything we desire, we must make choices on how we will use our resources.

Trade-offs and Opportunity Cost

ALL decisions involve trade-offs.

The most desirable alternative given up as a result of a decision is known as opportunity cost.

Trade-offs are all the alternatives that we give up whenever we choose one course of action over others.

(Examples: going to the movies)

What are trade-offs of deciding to go to college? What is the opportunity cost of going to college?

Econ of College

The 4 Factors of Production

21

The Four Factors of Production

Entrepreneurship

Capital

Labor

Land

•Producing goods and services requires the use of resources•ALL resources can be classified as one of the following four factors of production:

22

Land = All natural resources that are used to produce goods and services. Anything that comes from “mother nature.” (Water, Sun, Plants, Oil, Trees, Stone, Animals, etc.)

The Four Factors of Production

Labor = Any effort a person devotes to a task for which that person is paid. (manual laborers, lawyers, doctors, teachers, waiters, etc.)

23

Two Types of Capital: 1. Physical Capital- Any human-made resource

that is used to create other goods and services (tools, tractors, machinery, buildings, factories, etc.)

2. Human Capital- Any skills or knowledge gained by a worker through education and experience (college degrees, vocational training, etc.)

The Four Factors of Production

24

Entrepreneurship= ambitious leaders that combine the other factors of production to create goods and services.

Examples-Henry Ford, Bill Gates, Inventors, Store Owners, etc.

The Four Factors of Production

Entrepreneurs:1. Take The Initiative2. Innovate3. Act as the Risk Bearers

So they can obtain _________.

Profit= Revenue - Costs

PROFIT

TINSTAAFL

There is no such thing as a free lunch

TINSTAAFL People face tradeoffs Things always come with a Cost

To get one thing we have to give up something else Food v. clothing Leisure time v. work Efficiency v. equity Guns v. Butterhttp://www.youtube.com/watch?v=ie1XGTYueHw Jerry and his “free suit”

3 Basic Questions

1. What to Produce?1. Where should most of societies resources go?

2. How to Produce?1. Machines vs. Human labor2. Lower production costs vs. more jobs

3. For Whom to Produce?1. Who should receive the finished product?2. Should resources fulfill the needs of low income, middle

income or high income

Production Possibilities Curve

What trade-offs are involved?

100 Units

100 Units

Guns

Butter

Production Possibilities Curve

Represents the point at which an economy is most efficiently producing its goods and services

Is the economy allocating its resources in the best way possible?

Is the economy using all of its resources (land, labor, capital and entrepreneurs) efficiently?

Read Trade-offs, Opportunity Costs and Production Possibilities on pages 20 - 22

As you read, review the reading checks and economic analysis questions.

Production Possibilities Curve

What trade-offs are involved?

100 Units

100 Units

Guns

Butter

Production Possibilities Curve

Create your own production possibilities curves showing a constant, opportunity cost, an increasing opportunity cost and zero opportunity cost for one of your two units.