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Ch. 1-2

Ch. 1-2. Week of 8/26-8/30. Why do we have goods on our shelves in the stores. Who provides the goods? For EX: why are Coca-Colas for sale at stores ?. BELLWORK- 8/26. ◦ Goods – items that are economically useful or satisfies an economic want Consumer Goods – used by individuals

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Ch. 1-2

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  1. Ch. 1-2 Week of 8/26-8/30

  2. Why do we have goods on our shelves in the stores. Who provides the goods? For EX: why are Coca-Colas for sale at stores? BELLWORK- 8/26

  3. ◦ Goods – items that are economically useful or satisfies an economic want Consumer Goods – used by individuals Capital Good – Goods used to produce more goods ◦ Services – work that is preformed for someone ◦ Consumer(s) – a person who uses a good or service BASIC ECON CONCEPTS

  4. Value – worth that can be expressed in dollars • Utility – the capacity to be useful and provide satisfaction • Wealth – is the accumulation of products that are tangible, scarce, useful, and transferable from one person to another. QUESTION- WHAT HAPPENS WHEN YOU HAVE BOTH NECESSITIES AND LUXURIES? your standard of living increases Dolla’ Dolla’ Bill Y’all….

  5. How do you get the money to purchase the Coca-Cola? • How are these factors assembled into goods and services? • How do they end up on the shelf at a store? Why are there goods for sale in the store? What does the business get from the sale of the good? What does the consumer get? How does the consumer get the money to buy products? • http://education-portal.com/academy/lesson/circular-flow-of-economic-activity-the-flow-of-goods-services-resources.html Have a Coke and a Smile

  6. HOW DOES A CONSUMER RECEIVE GOODS AND SERVICES? BELLWORK: 8/27

  7. A market is a mechanism that allows buyers and sellers to exchange a certain economic product. • Factor Markets – are where productive resources are bought and sold. • Product Markets – are where producers sell their goods and services to consumers. Circular Flow Model

  8. Volunteers for Households/Consumers. • Volunteer to run a store to represent the Product Marketsign • Who wants to be a CEO for Business/Headquarters? • Who wants to run a factory: Factor/Resource Market? • These volunteers will sit at the front and back and two sides of the room with their placards. Representing consumers, businesses, factors of production markets (or resource markets), and product markets. Model Simulation

  9. Beginning with consumers and product markets: Ask how consumers obtain Coca-Cola (legally). Can you get it for free? Simulating Each Exchange

  10. What does the store do after the exchange from the buyer? What did the store or product market volunteer receive for the dollar? Simulation

  11. How do the Cokes get to the store? Did coca-cola headquarters get them for free? Simulation

  12. Students will draw Circular Flow Model with a partner, to check for understanding Think Pair Draw

  13. Economic growth occurs when a nation’s total output of goods and services increases over time. • Economic productivity is a measure of the amount of output produced by a given amount of inputs during a specific period of time. How to Increase Your Power…

  14. Human Capital is the sum of the skills, abilities, health, and motivation of people. EX: Government & Businesses can invest in human capital (labor) by providing education (training) and health care to improve the skill and motivation of its workers. HUMAN CAPITAL

  15. Economic Interdependence means that we rely on others, and others rely on us, to provide the goods and services that we consume. Get by with a little help from my friends

  16. 1)Identify the people in the movie who made a decision 2)what was the choice made 3)what was the second choice given up 4)what was the value of the choice given up (opportunity cost) 5)what was the reason for the choice taken. BELLWORK: 8/28- Jerry Maguire

  17. Division of Labor takes place when work is arranged so that individual workers do fewer tasks than before. Specialization takes place when factors of production perform tasks that they can do relatively more efficiently than others. The Labor Force

  18. What need will be satisfied? • What resource will be used? • How much of the resource will be used? Allocation

  19. Choosing among alternatives to satisfy Allocation • Very Similar to Opportunity Cost Trade Offs

  20. Every decision we make has its trade-offs or alternative choices. When you make an economic decision (a choice) opportunity cost are incurred.  Opportunity Cost -The value of what you give up when you make a choice.  Opportunity Benefit -The value of what you gain by making that choice. Trade Offs and Opportunity Cost

  21. THE US IS A FREE ENTERPRISE ECONOMY: consumers and privately owned businesses make the majority of the WHAT, HOW, and FOR WHOM decisions DOES THE United States USE THIS?

  22. DOES GOING TO SCHOOL HAVE TRADE- OFFS? BELLWORK-8/28

  23. Students will be in groups of 4 to discuss: Identify your occupational aspirations and explain why you are considering these jobs/careers. Also explain what, if any, post high school education is necessary for these jobs/careers….. Trade Offs and Allocation

  24. STUDENT'S CHOICE Connie plans to attend a state college and study to become an elementary teacher. Listed below are the costs of her choice. Year *Direct Costs of College*: Opportunity Costs (Lost Wages) Year One $ 8,000 $16,000 Year Two $ 8,500 $16,500 Year Three $ 9,000 $17,000 Year Four $ 9,500 $17,500 Total $35,000 $67,000 Compute the total cost of Connie's decision (College Costs + Opportunity Costs) $_________________________ * Includes room, board, tuition, books and supplies, personal expenses, also includes projected inflation for each year. What is the true cost of college?

  25. "When it takes, at least, an additional seven years of schooling, and over one hundred thousand dollars in costs and lost earnings, why would a person want to graduate from college instead of dropping out after the ninth grade?" An Economic Mystery

  26. 1. People economize. People choose the alternative which seems best to them because it involves the least cost and greatest benefit. 2. All choices involve cost. Cost is the second best choice people give up when they make their best choice. 3. People respond to incentives. Incentives are actions or rewards that encourage people to act. When incentives change, people's behavior changes in predictable ways. 4. Economics systems influence individual choices and incentives. How people cooperate is governed by written and unwritten rules. As rules change, incentives change and behavior changes. 5. Voluntary trade creates wealth. People can produce more in less time by concentrating on what they do best. The surplus goods or services they produce can be traded to obtain other valuable goods or services. 6. The consequences of choices lie in the future. The important costs and benefits in economic decision making are those which will appear in the future. Economics stresses making decisions about the future because it is only the future that we can influence. We cannot influence things that have happened in the past What is the most important factor when considering college?

  27. A city council meeting is called to allocate a budget of $100,000. The council would like to buy four new police cars at $25,000 each, two senior-citizen centers at $50,000 each, and build two new tennis courts at $50,000 each. Explain why a choice must be made, decide how the city council should spend its money, describe how the city council should spend its money, describe the trade-offs made, and identify the opportunity cost of the decision.

  28. Explain: There is no such thing as a free lunch. Bellwork 8/30

  29. You are a member of your state’s legislature, and there is a $500,000 surplus in the state budget. How much of that $500,000 would you spend on each of the following programs: aid to the homeless, money to retrain unemployed workers, aid to schools in poor neighborhoods, improvement of state roads, or money for the state society for prevention of cruelty to animals? Explain why you chose to support certain programs and to spend no money on others. What are the trade-offs? What is the opportunity cost of the choices that you made? [note: students should pick the top two choices and allocate funds into them In your groups analyze the following situations:

  30.  The various combination of goods and services that an economy can choose to produce.  When an economy is operating at full capacity it is operating at maximum production. This is also known as the production possibilities frontier.  Production possibilities help us understand the concept of opportunity cost. Production Possibilities Frontier

  31. Students will watch video of PPF to gain further understanding.

  32. If you are operating at maximum production, the only way to produce something new you must give up the production of another item.  If you have economic growth you can push the curve outward allowing for more total production. (Population Growth, Improving Technology, or growth in the Capital Stock which are investments in factories, etc.)  If you have idle resources (operating inside the curve) you will be able to produce more of both without giving up production. Explanation of Graph

  33. Students will complete worksheet • After completed, students will take quiz. Agenda

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