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Unit 1 Scarcity & Choice

Unit 1 Scarcity & Choice. How do people make choices?. EQ. What is your economic literacy score?. Your dreams  Your future. What will make you  Needs and Wants… Source of Income… Intangibles that money can’t buy…. Create a visual using pictures, images, drawings, words.

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Unit 1 Scarcity & Choice

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  1. Unit 1 Scarcity & Choice How do people make choices?

  2. EQ What is your economic literacy score?

  3. Your dreams  Your future What will make you  • Needs and Wants… • Source of Income… • Intangibles that money can’t buy… Create a visual using pictures, images, drawings, words

  4. To the old and true adage, "If you think education is expensive, try ignorance," we would add a stronger emphasis and a greater awareness of the astounding costliness of economic illiteracy.

  5. What is Economics? • Economics is the study of how individuals and societies use their scarce resources to satisfy their unlimited wants. • Scarce = limited • Resources = things used to make other things (goods & services)

  6. Land

  7. Labor

  8. Capital

  9. Entrepreneur Organize Resources Consumers buys things they need or want. Producers make money.

  10. Basic Economic Terms

  11. How do you deal with scarcity? • Your alarm went off this morning… • You have $1 left on your lunch account… CONGRATULATIONS!!!! You have just received your HS diploma What are you going to do with your life?

  12. Decision-making tool #1 Cost-benefit analysis This decision-making tool is best use when solving the problem of scarcity when you need to compare positives and negatives of which action to take or wise choice to make. Alternative: any possible course of action in a given situation. Benefit: positive consequence of action Cost: negative consequence of action Trade-off: giving up one thing to gain another Wise Choice: decision which gives the greatest benefit, least cost

  13. Cost-Benefit Analysis Wise choice is…

  14. Decision-making tool #2 PACED decision-making grid This decision-making tool is best use when solving the problem of scarcity in which you want to find the wise choice which best meets your needs. Problem: state the situation, which is “best” for me. Alternatives:identify possible courses of action Criteria: identify important features Evaluation: rank alternatives; best to worst Decision: select alternative with the greatest benefit, least cost

  15. PACED Problem: Which is best for me. Ranking 1 is best; 2 is ok; 3 is worst Wise choice is…BMSU

  16. Decision-making Project OPTION 1: Cost-benefit analysis ~ 6 points; 4 points This decision-making tool is best use when solving the problem of scarcity when you need to compare positives and negatives of which action to take or wise choice to make. OPTION 2: PACED decision-making grid ~ 16 pts; 4 pts This decision-making tool is best use when solving the problem of scarcity in which you want to find the wise choice which best meets your needs. Paragraph ~ 5 points PROJECT TOTAL= 35 points

  17. Scarcity,Trade-off & PPC Production Possibilities Curve (PPC) illustrates the maximum output combination of two goods; “on the line” Points A & B desirable; “best”? Point C is not possible Point D is inefficient To increase production of guns; Must decrease production of butter.

  18. Ravinia pp. 21-23 #1-7

  19. Economists Study the way in which individuals and society use their scarce resources to satisfy their unlimited wants. Paid professionals that predict people’s behavior Why did God create economists? To make the weathermen look good! Ha ha ha  Economics is the only field in which two people can get a Nobel Prize for saying exactly the opposite thing. (Myrdal & Hayek shared one in 1974)

  20. A mathematician, an accountant and an economist apply for the same job. The interviewer calls in the mathematician and asks "What do two plus two equal?" The mathematician replies "Four." The interviewer asks "Four, exactly?" The mathematician looks at the interviewer incredulously and says "Yes, four, exactly." Then the interviewer calls in the accountant and asks the same question "What do two plus two equal?" The accountant says "On average, four - give or take ten percent, but on average, four." Then the interviewer calls in the economist and poses the same question "What do two plus two equal?" The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says "What do you want it to equal?" 

  21. Economists Handy Dandy Guide

  22. King of Rock n Roll

  23. Why is Elvis reported as being alive? Use your “handy dandy guide” to solve the mystery!!!

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