ECONOMICS!!!

1. ECONOMICS!!!

2. What is it? • The study of how people seek to satisfy their needs and wants with limited resources…

3. How can you tell a country is prosperous? • What do you look at? • Why do you look as those things? • What makes a country like China more prosperous than Africa (countries)?

4. Factors of Production (F.O.P.) • Land (Nat. resources) • Labor (effort) • Blue collar vs. white collar • Capital (goods/services) • Physical vs. Human • Entrepreneurs • Risk takers who combine F.O.P. to suit their needs

5. When trying to satisfy our needs and wants we need to… • Define a “need” vs. a “want”. • With a partner come up with a list of needs and wants essential to your everyday living. • What do you think is meant by consumer sovereignty? • Think about the word sovereignty…and then consumer…

6. With your same partner… • Come up with a list of needs and wants for someone living in an impoverished country like many (countries) in Africa. • How do these differ than your list? • Do you have similarities? • If so what?

7. Miscellaneous • Needs AND Wants are both necessary to survive…why do you think this is? • Consumer Sovereignty-power to decide what gets produced and how much is distributed.

8. Goods vs. Services • Goods: physical things • Services: actions performed for others

9. Goods and Services

10. Scarcity • Limited quantity of resources to meet unlimited wants • This is the driving force of economics! • You want a market that has unlimited wants! • This is one major concept we use to tell if a country is prosperous.

11. Trade-Off • What would you rather be doing right now? • Make a list of possible activities you could be doing as opposed to being in school. • Trade-Off: giving up one desire to satisfy another

12. Trade-Offs

13. If you could be doing all these other activities… • Then why are you in school? • What is worth more…education or sleeping? • What will benefit you more in the long run? • Opportunity Costs: Value of what is given up in the trade off.

14. Opportunity Costs • Immediate gratification: give up long term satisfaction for short term. (ex-sleep as opposed to go to class) http://www.youtube.com/watch?v=tk-5E8aVlgM&feature=bf_prev&list=PLA46DB4506062B62B

15. Types of costs… • Fixed Costs: • The costs that remain basically constant no matter amount of goods sold. • Rent, Labor Wages, etc. • Variable Costs: • The costs that change regularly depending on amount of goods sold. • Supplies for a business

16. Types of costs… Come up with your own business. • Explain the factors of production that are used in the development of your business. • Are you providing goods or services? • What are the fixed costs of your business? What are the variable costs? • What trade-offs are there to consider in the running of your business? What are the opportunity costs of those trade-offs?

17. Types of Costs • Total Costs: Fixed + Variable Costs • Marginal Costs: • The cost of producing one additional unit of a good/service.

18. Types of Revenue • Marginal Revenue (AKA Marginal Benefit): • The revenue or benefit of producing one additional unit of a good/service • Law of Diminishing Return • The revenue or benefit of each additional unit goes down. • The more you have, the less it is worth. • Example: the more workers you hire, productivity will eventually go down.

19. Production • How can you make your business as productive as possible? • What types of things can you do? • What shouldn’t you do?

20. How can productivity increase? • Specialization • Mastering one task or the techniques for producing one specific good. • Think Human Capital! • Division of Labor • Dividing up the manufacturing process among specialized groups of workers. • Assembly Line • Workers focus on just one phase of the manufacturing process.