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Introduction to Economics and Opportunity cost

Introduction to Economics and Opportunity cost. Unit # 1. Definition of Economics.

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Introduction to Economics and Opportunity cost

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  1. Introduction to Economics and Opportunity cost Unit # 1

  2. Definition of Economics Economics can be defined in a few different ways. It's the study of scarcity, the study of how people use resources and respond to incentives, or the study of decision-making. It often involves topics like wealth and finance, but it's not all about money.

  3. Macro Economics The part of economics concerned with large-scale or general economic factors, such as interest rates and national productivity. Big nationwide issues. Crash Course on Macro: https://www.youtube.com/watch?v=d8uTB5XorBw

  4. Micro Economics The part of economics concerned with single factors and the effects of individual decisions or businesses. Crash Course Video on Microeconomics: https://www.youtube.com/watch?v=3ez10ADR_gM

  5. Scarcity Refers to a gap between limited resources and theoretically limitless wants. https://www.youtube.com/watch?v=Np-dZSdzymk

  6. Need vs. Wants List out on the t-chart, what you NEED to live vs. what you WANT to live with.

  7. Opportunity Cost Opportunity cost represents the benefits an individual, investor or business misses out on when choosing one alternative over another. https://www.youtube.com/watch?v=t58yS7fSsqU

  8. Question # 1 When your alarm went off, or your mother called you, what choice did you face this morning?

  9. Question # 2 Why did you have to make this choice?

  10. Let’s list your best alternatives on the board, and discuss the benefits of each:

  11. Franklin’s Decision Worksheet Debrief

  12. Use your own example, fill in chart and write a paragraph. Turn in!

  13. Directions to student pairs: • Choose 3 entries from the list. For each entry: • identify the next-best choice • list the benefits of each of your two alternatives Work with your table partner! eat breakfastride the buswalk your homecoming date to class and arrive tardy to your owngo out to lunchcut your last classgo in after school for help in physics ride the bus walk your homecoming date to class and arrive tardy to your own go out to lunch cut your last class go in after school for help in physics

  14. Compare notes with your partner on which choice you would make. • Discuss how you and your partner value the costs and benefits differently. • Did you and your partner make the same choice? • Did you and your partner make the same choice in a situation, but different reasons? Work with you partner!

  15. Group debrief: Post answers with cost and benefits on the board.

  16. Important Points: • Choosing is refusing- what are the benefits you are refusing by making the choice? The benefits you refuse are the opportunity cost of your choice? • People values differ-Individuals will place different value on the relative benefits of a set of alternatives and will thus make different choices. • People can’t escape opportunity cost-they are inherent part of all decision making.

  17. Factors of Production-Farm Example 1.Land: the farms land itself 2.Labor: the people who work the farm 3.Capital: The Tractors, Mills, the crop dusters, shovels, hoes, whatever equipment is used. 4.Entrepreneurship: The People or person who pays for all the inputs, invests in the farm.

  18. Presentations of your Factors posters

  19. Production Possibilities Curve https://www.investopedia.com/terms/p/productionpossibilityfrontier.asp The production possibility frontier (PPF) is a curve depicting all maximum output possibilities for two goods, given a set of inputs consisting of resources and other factors. The PPF assumes that all inputs are used efficiently https://www.youtube.com/watch?v=O6XL__2CDPU

  20. Production Possibilities Curve

  21. Production Possibilities Curves

  22. Production Possibilities Curves Let’s continue our discussion on our worksheet.

  23. Economic Spectrum

  24. Types of Economies Foldable Notes: 1 sheet of white paper 4 squares Front side type of economy and definition Back side picture representing the type of economy

  25. 3 Basic Economic Questions

  26. Adam Smith and Free Enterprise

  27. Pillars of Free Enterprise

  28. PositiveExternalities A positive externality exists if the production and consumption of a good or service benefits a third party not directly involved in the market transaction. For example,education directly benefits the individual and also provides benefits to society as a whole.

  29. Negative Externalities Negative consumption externalities. When certain goods are consumed, such as demerit goods, negative effects can arise on third parties. Common example include cigarette smoking, which can create passive smoking, drinking excessive alcohol, which can spoil a night out for others, and noise pollution.

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