Economics Pre-assessment

Let’s see what you already know about Economics!

What is Economics?

Taught by Professor Coleman

In this chapter, we’ll discuss . . .

O Scarcity and the Factors of Production

O Opportunity CostO Production Possibilities Curves

Scarcity and theFactors of Production

BellringerO What comes to

mind wheny you hear the word scarce?

O Brainstorm a list of items that you think might be scarce.

Key Terms: DefineO NeedO WantO EconomicsO GoodsO ServicesO ScarcityO ShortageO Factors of

production

O LandO LaborO CapitalO Physical capitalO Human capitalO Entrepreneur

Scarcity and ChoiceO People can’t have

everything they need and want

O Economics—study of how people seek to satisfy both by making choices

Why must people make such choices?

The reason is . . .

ScarcityO Scarcity implies

limited quantities of resources to meet unlimited wants.

O Economics is about solving the scarcity problem

O Not the same as shortage

O Occurs when producers will not or cannot offer goods/services at the current prices

Can Time Be Considered a Resource? Is it scarce?

O Create a chart that shows how, in a typical weekday, you allocate the 24 hours available to you.

Factors of Production

Which Scarce Resources were used to produce the

fruits and vegetables below?

Section 1 AssessmentO Record questions 1 through 6 on

page 6 of your textbook.O Submit your responses upon

entering class tomorrow.

Opportunity CostBellringer

Choose 1.

Key Terms Matching Activity

Trade-off

Guns or butter

Opportunity cost

Thinking at the margin

A. The most desirable alternative given up as the result of a decision

B. An alternative that we sacrifice when we make a decision

C. Deciding whether to do or use one additional unit of some resource

D. A phrase that refers to the trade-offs that nations face when choosing whether to produce more or less military or consumer goods

Trade-Offs . . .

O Individuals and Trade-offs

O Businesses and Trade-offs

O Society and Trade-offs

What are some trade-offs of buying a car?

Defining Opportunity Cost

O The most desirable alternative given up as the result of a decision is called the opportunity cost.

O Whatever you are willing to sacrificeO Using a Decision-Making Grid, Figure

1-2, pg. 10O What benefits will Karen forgo if she

chooses to sleep later?

Thinking at the MarginO Deciding whether to do or use one

additional unit of some resourceOR

O Deciding how much or how less to do

Thinking at the Margin

Options

Benefit Opportunity Cost

1st hour of extra study time

Grade of C on test

One hour of sleep

2nd hour of extra study time

Grade of B on test

2 hours of sleep

3rd hour of extra study time

Grade of B+ on test

3 hours of sleep

At what point is this person paying an added cost with

little extra benefit?

Section 2 AssessmentO Record and answer questions 1-4 on

page 11O Submit your responses upon entry

tomorrow

Production Possibilities Curves

BellringerDefine Key

TermsO Explain why

graphs sometimes show information more clearly than text or tables.

O Production possibilities curve

O Production possibilities frontier

O EfficiencyO UnderutilizationO CostO Law of increasing costs

Production PossibilitiesO Shows alternative ways to use an

economy’s productive resourcesO Textbook pages 14-15O What is the opportunity cost of the

decision in Graph A?O What is the opportunity cost of

choosing to produce the combination of goods shown at point c instead of that shown at point d?

Efficiency . . .O Efficiency—using resources to

maximize production or output of goods and services

O Represented by drawing a point inside the production possibilities frontier

O Underutilization—using fewer resources than the economy is capable of using

O Represented by any point inside the line (possibilities curve)

Growth . . . O When an economy grows, the entire

production possibilities curve “shifts to the right”O Immigrants pour in . . . WorkingO New inventions

O When production capacity decreases, the curve “shifts to the left”O Country loses land in a warO Population ages, becomes less healthy or

less educated (human capital decreases)

and Cost.O The alternative we give up when we

choose one option over the otherO View “The Law of Increasing Costs

Explained” on YouTubeO See Figure 1.7, page 17. What is the

cost of increasing watermelon production?

Section 3 AssessmentO Record and Answer questions 1

through 3 on page 18.O Submit upon entry tomorrow.

Chapter 1 ExamO Visit: PHSchool.comO Enter Web Code: mna-1011O Take Chapter 1 Self-TestO RAISE YOUR HAND UPON

COMPLETION SO I MAY RECORD YOUR GRADE.