The Beginning

We want everything for free! Free T shirts at college Free samples at Sam’s Club BOGO tan Is there such a thing as “FREE”? There is no such thing as a free lunch? Very few things in life are free. CLEAN

air isn’t free! Some where along the lines someone

paid for it!!!

TINSTAAFL

Foreign Language or acronym? Stands for: THERE IS NO SUCH THING

AS A FREE LUNCH!!

PROBLEMS? IN THE US?

What could be the biggest problem in the United States?

Money? NO! Scarcity, the condition that arises

because society does not have enough resources to produce all the things that people need and want!

What things are scarce?

Let’s all be millionaires! What would we buy?Would we work?Would there be enough of goods and

services?Money=no goods to buy=worthlessBread more valuable than money?

Factors of Production

1. Land, natural resources not created by human effort Examples:

Enough of beaches for everyone to vacation at once?

2. Capital, tools equipment and factories used in the production of good and services

It is a result of production Examples?

3. Labor, the people with all their abilities, skills and efforts

Can change, how? Why?

4. entrepreneurs, the risk takers in our society

The people who open their own business and take a chance at losing big

THEY ARE THE DRIVING FORCE OF OUR ECONOMY!

More and more fun!! Can it get any better???

SECTION 2

WANT WANT WANT WANT

Can we have everything that we want? Who has EVERYTHING that they want? Life is not fair??? Sometimes we have to make

alternative decisions called trade-offs Could involve spending or time Make quick decisions or based on

criteria Football game?

What should I do???

Go to the football game or go to work? That is the question. Well lets think about consequences with a decision making grid

They are helpful because they force you to consider a number of relevant alternatives AND CRITERIA you are basing your decision on

You can do that but it will cost you!!!! When you make a decision there is

an opportunity cost Cost means more than a price tag, if

your late for class what’s the cost? It is an alternative that is given up Wake up late for job and don’t go,

opportunity cost of staying home is the oney lost from work!

I don’t understand

Economists find it easy to explain opportunity costs with a production possibilities frontier

A diagram representing various combinations of goods/services an economy can produce when all productive resources are fully employed

Chapter 1

I WANT WANT WANT WANT WANT IS IT FEASIBLE TO HAVE ALL WE WANT

AND NEED? WHAT IS THE DIFFERENCE BETWEEN A

WANT AND A NEED? NEED IS A BASIC REQUIREMENT FOR

LIVING A WANT IS A MEANS TO EXPRESS A

NEED EXAMPLE: I WANT A PIZZA SATISIFIES A

NEED FOR FOOD

HOW DO WE FEED OUR WANTS AND NEEDS? ARE THERE HIGHER LEVELS OF

NEEDS? HUMAN ATTENTION KNOWLEDGE

ECONOMICS IS CONCERNED WITH ECONOMIC PRODUCTS, GOODS AND SERVICES THAT ARE USEFUL, RELATIVELY SCARCE AND TRANSFERABLE TO OTHERS

TYPES OF ECONOMIC PRODUCTS A GOOD, IS AN ITEM THAT IS

ECONOMIC USEFUL OR SATISFIES AN ECONOMIC WANT, SUCH AS A BOOK OR CAR

A SERVICE, IS SOMETHING THAT IS PERFORMED BY SOMEONE ELSE FOR EXAMPLE, A HAIRCUT, OR HOME

REPAIRS

TWO TYPES OF GOODS

CONSUMER GOODS, ARE INTENDED FOR FINAL USE BY THE INDIVIDUAL

CAPITAL GOOD, IS A GOOD USED IN THE PRODUCTION FOR ANOTHER GOOD OR SERVICE

DURABLE GOOD, IS A GOOD THAT LASTS THREE YEARS OR MORE

NONDURABLE, DUH THE OPPOSITE

WE ARE ALL CONSUMERS

CONSUMERS INDULGE IN THE PROCESS OF CONSUMPTION, OR USING UP GOODS AND SERVICES TO SATISFY THEIR WANTS AND NEEDS

THEY ARE IMPORTANT BECAUSE WITHOUT THEM THE MARKET WOULD CRASH

WHEN WE PURCHASE SOMETHING, WE VOTE AND ITS POPULARITY

VALUE=$, OR DOES IT????

IN ECONOMICS WE REFER TO VALUE AS SOMETHING IN DOLLARS AND CENTS

WHY ARE SOME THINGS MORE EXPENSIVE THAN OTHERS? PARADOX OF VALUE, WHAT APPEARS TO

BE FASLE IS ACTUALLY TRUE NECESSITIES SUCH AS WATER HAVE LITTLE

MONETARY VALUE, YET A DIAMOND RING IS HIGH IN VALUE. WHY???????

IN A NUTSHELL, SCARCITY IS REQUIRED FOR VALUE

TO HAVE VALUE YOU NEED??? FOR SOMETHING TO HAVE VALUE IT

MUST HAVE: 1. UTILIITY, TO BE USEFUL OR TO

PROVIDE SATISFACTION CAN THAT VARY??? 2. SCARCITY, YOU CAN’T BUY IT ON THE

STREET

I WANNA BE RICH, LAAA LAAA LAAA!!! OH TO BE RICH, EVERYONE WANTS

TO HAVE WEALTH RIGHT?? WEALTH, IS THE ACCUMULATION OF

THOSE PRODUCTS THAT ARE SCARCE, TANGIBLE, USEFUL AND TRANSFERABBLE FROM ONE PERSON TO THE NEXT

HOW DO I GET WEALTHY??

WEALTH IS MADE POSSIBLE BY THE CIRCULAR FLOW OF ECONOMIC ACTIVITY

WHEN BUYERS AND SELLERS IN A MARKET EXCHANGE CERTAIN PRODUCTS

WE GET ECONOMIC GROWTH WHEN THE TOTAL OUTPUT OF GOODS AND SERVICES INCREASES OVER TIME

KEY FACTORS IN ECONOMIC GROWTH EFFECTIVE MARKET PRODUCTIVITY, A MEASURE OF THE

AMOUNT OF OUTPUT PRODUCED BY GIVEN AMOUNT OF UINPUT IN A SPECIFIC TIME

DIVISION OR LABOR AND PRODUCTIVITY??? HOW CAN AN ASSEMBLY LINE WORK

BETTER THAN EVERYONE HAVING TEN JOBS???

SPECIALIZATION, EVERYONE GETS BETTER AT ONE JOB RATHER THAN THREE

HUMAN CAPITAL, SUM OF THE SKILLS, ABILITIES, HEALTH AND MOTIVATION OF PEOPLE

ARE WE DEPENDENT ON ASIA, GERMANY?? YESSSSSSSSS, WE ARE

ECONOMICALLY INTERDEPENDENT, MEANING WE RELY ON OTHERS FOR GOODS AND SERVICES AND THEY RELY ON US

EXAMPLE ANYONE?????

REST OF THE WEEK

WORK ON HOT DOG STANDS CURRENT EVENTS FIRDAY AND

REVIEW TEST ON TUESDAY BUSINESS PLAN STUFF ????