Unit 1

1. Unit 1 Scarcity, Choice, and Opportunity Cost Chapter 1 Sections 1,2,3

2. Want Need Goods Services Consumer Producer Define each in your own words; leave space for the “official” definition. Bellringer #1

3. Wants vs. Needs (Bellringer 1 continued) • List wants • List needs • Are there other higher level needs such as love and acceptance?

4. Goods and services • Goods—physical objects that can be purchased • Services—work that one person performs for another for payment

5. Consumers v Producers • Consumer-buys goods or services • Producer—person who makes goods or provides services

6. Write the definition in your own words. • Synonyms Scarcity – The condition that arises because society does not have enough resources to produce all the things people want and need. Use the word in a sentence. Draw a picture to Illustrate the word.

7. Economics • The social science that deals with how people use their scarce resources to satisfy their wants and needs

8. Scarcity affects Everyone • How does scarcity affect consumers? • Trade-offs and opportunity costs How does scarcity affect producers? Must find the most efficient way to use scarce resources

9. Scarcity leads to 3 Questions • What will be produced? • How will it be produced? • For Whom will it be produced?

10. Musical Chairs How can you explain the concept of scarcity using the game “musical chairs”?

11. Bell Ringer #2— What does the term TINSTAAFL stand for?

12. Resources • People cannot satisfy all their wants and needs because of the scarcity of productive resources. • These resources are called the Factors of Production (FOP).

13. Land • Land- naturalresources • Land includes more than just the ‘ground’. Includes all things not man-made

15. Labor • Labor –people with all their efforts, abilities, and skills

16. Capital • Capital – the money, tools, equipment, and factories used in the production of goods and services. A capital good is the result of production. Example: hammer; oven Financial capital--money

17. Types of Capital • Financial Capital – the money used to buy capital goods. • Capital Goods the physical tools, equipment, etc.

19. Entrepreneurship • Entrepreneur a risk-taker in search of profits

20. Entrepreneurs • The initiative of Entrepreneurs combines the resources of land, labor, and capital into new products. • They are the driving force in the American Economy

21. Unit 1, Activity 3“The Factors of Production” Using a magazine or newspaper, cut out a picture of a product. Then, give an examples of each of the factors of production that were combined in its production. (Worksheet turned in for grade)

22. Incentive Utility Trade-off Opportunity Cost Review some of these words from your chapter. In your Unit 1 Glossary, define the following terms (using your own words) from Ch 1, Sec 2

23. Choice • Choice is illustrated by the way you give up any of your resources. • Why do we have to make economic choices?

24. Choice • Choice is normally illustrated by the way you spend your money.

25. Free Lunch? • There is No Such Thing as a Free Lunch.

26. Free?

27. Free? • Free sausage with the purchase of a car at Price LeBlanc.

28. Opportunity Cost • You have a Free Enterprise Quiz tomorrow. You can go home and study or watch TV. • If you study, you had to give up watching TV • If you watch TV, you gave up studying for the quiz and understanding the information.

29. Decision-Making Grid What is your trade-off? What is the opportunity cost?

30. Market – place where buyers and sellers meet to exchange Circular Flow Model Product Market Factor Market Bell Ringer 2 Continued In your Unit 1 Glossary, define the following terms (using your own words) from pg 52-53.

37. CircularFlow Activity(Class activity 1-14-08) • Households each have 15 factors of production (5 land, 5 labor, 5 capital) • Businesses each have $1,000. • MAKE SURE YOU HAVE THE CORRECT NUMBER OF SLIPS OF PAPER!

38. FACTOR MARKET • Businesses will negotiate with households to purchase as many factors of production as possible. • Businesses need groups of 3 to trade in for products (1 land, 1 labor, 1 capital) • Both businesses and households are trying to get the best deal for the money.

39. PRODUCT MARKET • Businesses have traded in 1 land, 1 labor, 1 capital for 1 product • Households will negotiate with businesses to purchase products with their new money. • Both businesses and households are trying to get the best deal for the money. • The household with the most products wins • The business with the most money wins

40. Production Possibilities Curve Efficiency Underutilization Bell Ringer-1-15-08—Worksheets on circular flow and PPF questions In your Unit 1 Glossary, define the following terms (using your own words) from Ch 1, Sec 3

41. Production Possibilities Frontier

42. Production Possibilities Frontier

43. Production Possibilities Frontier • Which points represent efficiency? • Which point represents underutilization?

44. Moving the PPC • PPC increases (moves out) when: • More resources are available • Production becomes more efficient (creates less waste)

45. Moving the PPC • PPC decreases (moves in) when: • Shortage of resources available • Production becomes less efficient(waste more resources)

46. Video on Scarcity—Answer worksheet and turn in for a grade