EconomicsEconomics

Chapter 1Chapter 1

Anticipatory SetAnticipatory Set

If you had a genie what are 3 things If you had a genie what are 3 things you would wish for…?you would wish for…?

YouTube - I Dream of Jeannie opening

EconomicsEconomics

Well, if genies were real we would Well, if genies were real we would not need to study economics…not need to study economics…

EconomicsEconomics is a social science that is a social science that studies how people, acting as studies how people, acting as individuals and in groups, decide to individuals and in groups, decide to use scarce resources to satisfy their use scarce resources to satisfy their wants.wants.

Opportunity CostOpportunity Cost

What are two jobs you would like to What are two jobs you would like to have as an adult?have as an adult?

What if you could only pick one?What if you could only pick one? What do you do after school?What do you do after school? Is there anything you would rather do?Is there anything you would rather do? Opportunity CostOpportunity Cost is the highest is the highest

valued alternative given up as the valued alternative given up as the result of making a choice.result of making a choice.

EconomicsEconomics

ProductionProduction is a process that combines is a process that combines economic resources so the result is a economic resources so the result is a good or service that is available for salegood or service that is available for sale

DistributionDistribution is the process of getting a is the process of getting a product or service to consumers—product or service to consumers—before the human want can be satisfiedbefore the human want can be satisfied

ConsumptionConsumption is the use of a product is the use of a product or service that completes the want or service that completes the want satisfaction chain.satisfaction chain.

ResourcesResources

There are three types: There are three types: natural, human, natural, human, and capitaland capital

Natural-Natural-the unaltered gifts of nature, the unaltered gifts of nature, such as soil, timber, minerals and fresh such as soil, timber, minerals and fresh waterwater

LaborLabor-the physical and mental efforts -the physical and mental efforts people use to create goods and servicespeople use to create goods and services

CapitalCapital- the buildings, tools, and - the buildings, tools, and machines people use to create goodsmachines people use to create goods

ALL OF THESE ADD UP TO THE FACTORS ALL OF THESE ADD UP TO THE FACTORS OF PRODUCTIONOF PRODUCTION

ResourcesResources

The fourth factor of production is The fourth factor of production is often called entrepreneurship.often called entrepreneurship.

Entrepreneurship is the imagination, Entrepreneurship is the imagination, innovative thinking, and innovative thinking, and management skills need to start and management skills need to start and operate a business.operate a business.

Scarcity and Opportunity CostScarcity and Opportunity Cost

What does the phrase “people are What does the phrase “people are never satisfied” mean to you?never satisfied” mean to you?

The gap between peoples wants and The gap between peoples wants and the economies resources is called the economies resources is called scarcity.scarcity.

Scarcity=Wants>Available resourcesScarcity=Wants>Available resources ……the diamond water paradoxthe diamond water paradox ……professional athletes contractsprofessional athletes contracts

Questions: What parts of production Questions: What parts of production does a franchise cover for a business does a franchise cover for a business owner? Please use economic terms. owner? Please use economic terms. Capital, etcCapital, etc

Would you ever consider a franchise? Would you ever consider a franchise? Why or Why not?Why or Why not?

What aspects of a business do you think What aspects of a business do you think they provide that are the most helpful?they provide that are the most helpful?

What are the franchisees struggling What are the franchisees struggling with in dealing with McDonald’s?with in dealing with McDonald’s?

MarketMarket – an arrangement that – an arrangement that allows buyers and sellers to make allows buyers and sellers to make exchangesexchanges

MacroMacro—study of economy as a —study of economy as a wholewhole

MicroMicro-study of individual tastes-study of individual tastes