Unit 1: Chapter 1- Economic Concepts What is Economics? -Scarcity - Factors of Production -

1. Unit 1: Chapter 1- Economic Concepts What is Economics? -Scarcity-Factors of Production-

2. Essential Questions- Do now! • Take a Textbook- write the number on the book list • Take out your notebooks/ Paper • Are you satisfied with the possessions you have in life? If not, why? If yes, why? • Identify 5 wants you have right now. • List two ways how scarcity has impacted your life: socially, and finically.

3. Objectives • Understand why scarcity affects everyone. • List the three economic questions that societies face because of scarcity. • Describe the four factors of production and their uses.

4. KEY CONCEPTS • Wants — desires that can be met by consuming products • Needs — things necessary for survival • Scarcity — lack of resources available to meet all human wants • not a temporary shortage • Economics — study of how people use resources to satisfy wants • examines how individuals and societies choose to use resources • organizes, analyzes, interprets data about economic behaviors • develops theories, economic laws to explain economy, predict future

5. How does scarcity effect us? In a group of three

6. What I want and what I need • Want: a way of expressing a need. • “I want to eat lunch at Chipotle.” • Jordan’s • Clothing from Hollister • Iphone and ipad • Mercedes Benz • 5 bedroom house for 2. • Need: Basic requirement needed for survival. • “I need to eat, so I can concentrate in school.” • Food • Water • Shelter • Clothing • shoes

7. 3 Basic Economic Questions In a group of 3 read one of the following section on pages 6-7 and summarize it for your partners • What to Produce? • How to Produce? • For Whom to Produce? • Why do we need to consider these questions?

8. Factors of Production • Land • “gifts of nature” / natural resources not man made • Fields, deserts, livestock, sunshine and climate • What social factors may affect the availability of land? • Labor • People with efforts, abilities, and skills • Non-entrepreneurs • What social factors may affect the availability of labor? • Capital • Tools, equipment, machinery, factories. • Items used to produce goods or services • Financial capital: What is it? • What social factors may affect the availability of capital? Q: How are these three factors interconnected?

9. Entrepreneurship • Entrepreneurship — vision, skill, ingenuity, willingness to take risks • Entrepreneurs anticipate consumer wants, satisfy these in new ways • develop new products, methods of production, marketing or distributing • risk time, energy, creativity, money to make a profit

10. Review of Section 1: What is Economics? 1. Which response best explains why the study of economics is important? • Describes our standard of living • Become better decision makers • Increase our consumption of consumer goods • Determine what goods out to be produced 2. Which response best explains the money used to buy the tools and equipment needed for production? • Capital goods • Financial capital • The factors of production • Wealth 3.

11. Which response does not explain the factors of production? • entrepreneurship • money • Labor • capital

12. Economic Concepts • GDP: the dollar value of all final goods and services and structures produced within a countries borders in a 12-month period.

13. Peer Activity: Follow Up • Look through advertisement ads • Find wants and need and post them. • Try to find at least 1 form of Land, labor, and capital through pictures or words • Post on construction paper.

14. Economics Choices: Opportunity Cost, You’ve Economized! VS. How do incentives and utility influence your decision making? Making Choices involves… • Motivation for Choices • TINSTAAFL • Decision –Making Process How do trade-offs and opportunity cost influence your cost-benefit analysis? Application: You have enough money to buy either an iPod touch player that is on sale or some school supplies you want. What incentives and utility would guide your decision?

15. Marginal Cost and Marginal Benefits • Cost: additional cost of using 1 more unit of a product • Benefits: additional satisfaction from using 1 more of a product • Turn to page 16 • Complete a decision making grid in your group under application C.

16. Analyzing Decision Making Grid • Turn to page 15 in your textbook • Follow along as we review the grid • Follow up questions: • What is Max’s opportunity cost of three hours of study? • What is Max’s marginal cost moving from a grade of B+ to a grade of A-? 2 pts EC **What prediction would analyzing the marginal cost and marginal benefits illustrate?

17. Production Possibilities Curve PPC • Illustrates the impact of scarcity on an economyby showing the max number of goods and services that can be produced using limited resources. (Based on assumption) • Assumptions • Resources are fixed • All resources are fully employed • Only two things can be produced • Technology is fixed • PPF?

18. What do PPCs teach us? • Our efficiency as a nation • Underutilization • Law of increasing opportunity cost • Shifts in PPC

19. Branches of the Economic Macroeconomics Microeconomics Individual economy Consumer markets, business markets, and labor markets Markets, prices, costs, profits, competition, government regulation, consumer behavior, business behavior • Whole economy • Economic growth, stability, and international trade • Interest: money, banking, finance, government taxation and spending polices, unemployment and employment • inflation

20. Houston we have a problem! Problem Task Form groups of 2 or 3 5 minutes to discuss ways to distribute the popcorn (remember our constitution) list all possible ways as a class (No discussion) Lets Group categories Advantages and Disadvantages 1 vote each to determine who gets the popcorn • Shortage of Money • Scarcity of Items • Popcorn • Pop tarts • Warheads • Alternatives Choices • What will it cost? • i.e. buying a $10,000 used car, going to a movie with friends next Thursday night

21. Why is it important for economist to use to positive and normative economics? illustrations • Read Section 4 • Create the table below and complete this section with a partner and be ready to discuss.

22. Adam Smith Reading • What division of labor trends are found in smaller factories? • What is the division of labor needed? • What problems do you believe may happen with the division of labor visible in a large factory? • What was Adam Smith’s purpose of this article?