Unit 1: Chapter 1 What is Economics?

-Scarcity-FOPs

-Economic Concepts

Warm Up: What shortages are present and how may it affect those who want to buy them?

We can’t always get what we want!

• What is Economics?

– Study of how people try to satisfy what appears to be seemingly unlimited and competing wants through the careful use of relatively scare resources

• Scarcity: the condition that results from society not having enough resources to produce all the things people would like to have.

– Q:How does this potential affect a nation?

Factors that canInfluence a Decision

A. Values

What is important to your family, others in your culture?

B. Peers

People you know

Pressure for positive or negative behaviors

C. Habits

You are accustomed to doing it this way

D. Feelings (love, anger, frustration, ambivalence, rejection)

If you do make a certain decision

If you don’t make a certain decision

E. Family Your family’s preference

Decisions other family members have made

F. Risks and consequences What (or how much) you stand to win

What (or how much) you stand to lose

G. Age Minor

Adult

Factors that canInfluence a Decision

What I want and what I need

• Want: a way of expressing a need.

• “I want to eat lunch at Chick-fil-a

– Jordan’s

– Nike apparel

– Wireless beats

– Alfa Romeo

– 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

TINSTAAFL

• “There is no such thing as a free lunch”

– We have limited

– Nothing is free

Analyzing Decision Making Grid

– 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?

Choice Benefit Opportunity Cost Trade-off

1 hr of study time D in government class

1 Hour with friends Hanging Out

2 hrs of study time C in government class

2 Hours with friends Hanging Out

3 hrs of study time B in government class

3 Hours with friends Hanging Out

4 hrs of study time A in government class

4 Hours with friends Hanging Out

Choosing Brand Name Jeans Over No-Name Jeans

Pros Cons

Better Fit Cost More

My outfit is on fleek!

I will look just like everyone else.

Feel better about myself. “My outfit

gives you life!”

I can only afford one pair.

Homework- Making Predications of The P-Elect OTUS first 100 Days

• Watch the in coverage of Inauguration Day

• CNN’s coverage of Inauguration Day will be streamed live in its entirety to CNN.com’s homepage and across mobile devices via CNN's apps for iOS and Android, starting at 6:00am ET on Inauguration Day, January 20, 2017, running through midnight and beginning again at 10:00am ET on Saturday, January 21, 2017 running through 4:00pm ET.

• 8:30 a.m. ET: Trump will attend a church service with his family. Vice President-elect Mike Pence and his family will also join.

• 9:30 a.m. ET: Trump goes to a White House tea reception hosted by President Barack Obama and First Lady Michelle Obama. Pence and his family will also be in attendance.

• 10:30 a.m. ET: The President-elect and his family travel to the US Capitol for the swearing-in ceremony.

• Around noon ET: Trump and Pence will be sworn in

Q: Which family will likely increase their buying power in the next 10 years?

Choice Benefit Opportunity Cost

Using a DMG list decisions the Robinsons’ and Murrays’ have made in Education, Mortgage,

and Children’s education savings plan.

DMG Exit Slip- see readingIndicate 3 things you learned about

decision making according to the Robinsons’ and Murrays’.

2 things you think they should have done differently

1 solution you would take if you were the Murrays’ and lived their

live

Review of Section 1: What is Economics?

1. Which response best explains why the study of economics is important?

a. Describes our standard of living

b. Become better decision makers

c. Increase our consumption of consumer goods

d. Determine what goods out to be produced

2. Which response best explains the money used to buy the tools and equipment needed for production?

a. Capital goods

b. Financial capital

c. The factors of production

d. Wealth

3. Which response does not explain the factors of production?

a. entrepreneurship

b. money

c. Labor

d. capital

Factors of Production• Entrepreneurship

• 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 four factors interconnected?

3 Basic Economic Questions- video analysis

1. What to Produce?

2. How to Produce?

3. For Whom to Produce?

1. Why do we need to consider these questions?

2. What would happen if Starbucks CEO Howard Schultz decided to market his product to another target audience?

Peer Practice- Consider the item you have been assigned and answer the economic questions below

1. What to Produce? (item assigned)2. How to Produce? ( include FOPs)3. For Whom to Produce?

Challenge: Predict would happen to the sales of the item you have been assigned if you targeted your product to the wrong audience?

Production Possibilities Curve PPC

• Illustrates the impact of scarcity on an economy by showing the max number of goods and services that can be produced using limited resources. (Based on assumption)

• Assumptions1. Resources are fixed

2. All resources are fully employed

3. Only two things can be produced

4. Technology is fixed

– PPF?

Production Possibilities Table

Schedules Chicken Sandwich Angry Whopper

A 0 40

B 18 32

C 50 27

D 100 16

VS.

Construct your own PPC

$2.35 $4.29

What do PPCs teach us?

• Our efficiency as a nation

• Underutilization

• Law of increasing opportunity cost

• Shifts in PPC

Monsters, Inc. Production Possibilities Peer Analysis

1. What are the Factors of Production illustrated in Monsters, Inc. video clip?

2. What two products are they looking to produce?

3. What shortage is being faced by Monsters, Inc. and what serves as the cause?

4. What happens to the curve if resources are underutilized?

5. How would production impossibility look within Monsters, Inc. according to the Production possibilities curve?

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

Economics Choices: Opportunity Cost, You’ve Economized!

VS.

How do incentives and utility influence your decision making?

Making Choices involves…1.Motivation for Choices2.TINSTAAFL3.Decision –Making Process

Homework: Watch the super bowl commercials and identify the incentives marketed to create demand. Predict the effectiveness of marketing attempt. Identify the projected target audience and incentives and utility would guide their decision to buy?

How do trade-offs and opportunity cost influence your cost-benefit analysis?

Branches of the Economic

Macroeconomics

• Whole economy– Economic growth, stability,

and international trade

– Interest: money, banking, finance, government taxation and spending polices, unemployment and employment

– inflation

Microeconomics

• Individual economy– Consumer markets, business

markets, and labor markets

– Markets, prices, costs, profits, competition, government regulation, consumer behavior, business behavior

Economic Concepts

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

Houston we have a problem!Problem

• 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

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

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.

Concepts Similarities Differences

Charts and Tables vs. Graphs

Micro vs.Macro

Positive vs. Normative

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?

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.