What is scarcity? (Look in your notes) What is scarcity? (Look in your notes) Why is scarcity an important factor in Why is scarcity an important factor in economics? (Look up the definition of economics? (Look up the definition of economics) How does scarcity effect the economics) How does scarcity effect the price of goods and services? 6 Sentencesprice of goods and services? 6 Sentences

Principles of EconomicsPrinciples of Economics

Goal 7Goal 7

The learner will investigate how and The learner will investigate how and why individuals and groups make why individuals and groups make economic choices.economic choices.

ObjectiveObjective

7.01: Describe the basic factors of 7.01: Describe the basic factors of production their impact on economic production their impact on economic activities.activities.

7.02: Explain how scarcity influences 7.02: Explain how scarcity influences producers and consumers to make producers and consumers to make choices.choices.

What is Economics?What is Economics?

Broken down into 2 definitionsBroken down into 2 definitions

1: study of how we make decisions in a 1: study of how we make decisions in a world in which resources are limitedworld in which resources are limited

2: How things are made, bought, sold and 2: How things are made, bought, sold and usedused

Micro vs. MacroeconomicsMicro vs. Macroeconomics

Microeconomics: Looks at the little picture. Microeconomics: Looks at the little picture. How people and small business function in How people and small business function in an economyan economy

Macroeconomics: Looks at the big picture. Macroeconomics: Looks at the big picture. How governments or whole industries or How governments or whole industries or societies function in an economysocieties function in an economy

ScarcityScarcity

Scarcity: when we do not have enough Scarcity: when we do not have enough resources to produce all the things we resources to produce all the things we would like to havewould like to have

VocabularyVocabularyGoods: tangible products that we use to Goods: tangible products that we use to satisfy our wants and our needssatisfy our wants and our needs

Service: Work performed by a person for Service: Work performed by a person for someone elsesomeone else

Production: The process of making Production: The process of making somethingsomething

Gross Domestic Product (GDP): total Gross Domestic Product (GDP): total dollar value of all final goods and services dollar value of all final goods and services produced in a country during a single yearproduced in a country during a single year

VocabularyVocabularyConsumer: Person buying or using the Consumer: Person buying or using the goodgood

Producer: Person making a goodProducer: Person making a good

Pricing: How much something costsPricing: How much something costs

Wages: Paid by the hourWages: Paid by the hour

Salary: Paid an agreed upon sum for all Salary: Paid an agreed upon sum for all the workthe work Write 3 examples each of salaried jobs and Write 3 examples each of salaried jobs and

wage jobswage jobs

Basic Economic QuestionsBasic Economic Questions

What goods and services should be What goods and services should be produced?produced?

How should the goods and services be How should the goods and services be produced?produced?

For whom should the goods and services For whom should the goods and services be produced?be produced?

Starting a Business

In order to start a business you must first answer the 3 economic questions.

Get with a partner and figure out a product to sell by using the 3 economic questions.

What impact will the scarcity of What impact will the scarcity of a resource have on consumers? a resource have on consumers?

A.A. A surplus of certain products will occur.A surplus of certain products will occur.

B.B. The cost of certain products will increase.The cost of certain products will increase.

C.C. A desire to own certain products will A desire to own certain products will increase.increase.

D.D. The purchase of certain products will The purchase of certain products will cease.cease.

How will a scarcity of jobs How will a scarcity of jobs impact industrial production?impact industrial production?

A.A. Production will increaseProduction will increase

B.B. Production will decreaseProduction will decrease

C.C. Production will not changeProduction will not change

D.D. Production cannot be determinedProduction cannot be determined

Cause and Effect Maps

What will happen to production, price, profit if there is a scarcity of labor?

What Will happen to production, price, and profit if there is a good orange crop in Florida?

What will happen to Production, price, and profit if a heavy freeze kills the orange crops in Florida?

What is the relationship between scarcity, production, and price?

Factors of ProductionFactors of ProductionFactors of Production: Resources Factors of Production: Resources necessary to produce goods and necessary to produce goods and servicesservices

1.1. Land (natural Resources): Resources Land (natural Resources): Resources from nature from nature

1.1. Ex: Surface land, water, fish, animals, Ex: Surface land, water, fish, animals, forests, mineral depositsforests, mineral deposits

2.2. Renewable Natural Resources: Resources Renewable Natural Resources: Resources that grow back. that grow back.

3.3. Non Renewable Natural Resources: Once Non Renewable Natural Resources: Once you run out, you can’t get anymoreyou run out, you can’t get anymore

2.2. Labor: nations work forceLabor: nations work force

Cont..Cont..

3.3. Capital: Manufactured goods used to Capital: Manufactured goods used to make other goods and services. make other goods and services.

1.1. Machines, building, toolsMachines, building, tools

4.4. Entrepreneurship: person who starts new Entrepreneurship: person who starts new business, introduces new products, business, introduces new products, improves processimproves process

1.1. Important to economy b/c they provide jobs, Important to economy b/c they provide jobs, goods and servicesgoods and services

Which factor of production does Which factor of production does each picture illustrateeach picture illustrate

Which factor of production involves Which factor of production involves the worker and the value of his/her the worker and the value of his/her

timetime

A.A. LandLand

B.B. Labor Labor

C.C. Capital Capital

D.D. Entrepreneurship Entrepreneurship

Which factor of Production Which factor of Production would natural resources be?would natural resources be?

A.A. LandLand

B.B. Labor Labor

C.C. CapitalCapital

D.D. EntrepreneurshipEntrepreneurship

If there is a large migration of workers from the north to the south, which factor of production would be

the most effected?Land

Labor

Capital

Entrepreneurship

Factors of Production

Choose a good and figure out what factors of production you will need to make those goods

On a sheet of paper, draw and color your good in the center.

In each corner of your paper list your factors of production i.e. Land in the top left corner, labor in the top right corner, capital in bottom left corner, Entrepreneurship in the bottom right corner

Explain how each is used

Wants vs. NeedsWants vs. Needs

Want: things we would like to have (Instant Want: things we would like to have (Instant gratification: You get reward right away)gratification: You get reward right away)

Need: things required for survivalNeed: things required for survival

Trade Offs and Opportunity Costs

Trade Off: When you have to choose one Trade Off: When you have to choose one thing or anotherthing or another

Opportunity Costs: What it costs you to Opportunity Costs: What it costs you to choose one thing over anotherchoose one thing over another

If Mrs. Dorencamp has tickets to the super bowl on Sunday or can go to a party and she chooses to

go to the super bowl, what is her opportunity cost?

A. The cost of the football tickets

B. The fun she will have at the party

C. The cost of gas to the stadium

D. Her friends will never talk to her again

What type of economy is the American Economy? How can you

tell

Hint: Think about factors of production, economic questions, consumer sovereignty.

Goal 8

The learner will analyze features of the economic system of the United States.

Objective

8.03: Explain the circular flow of economic activities and how interactions determine the prices of goods and services.

What is a market?What is a market?

Free and willing exchange of goods and Free and willing exchange of goods and services between buyers and sellers.services between buyers and sellers.

What do markets have to do with What do markets have to do with economics?economics?

Circular Flow of Economic ActivityCircular Flow of Economic ActivityCircular Flow Model: shows how markets Circular Flow Model: shows how markets interactinteract

4 Sectors4 Sectors

Sector: PartSector: Part

2 Markets2 Markets

1. Consumer Sector1. Consumer Sector Factor Markets (household): where the factors Factor Markets (household): where the factors

of production are bought and soldof production are bought and soldconsumers earn income (wages, salary)consumers earn income (wages, salary)

Businesses buy factors of productionBusinesses buy factors of production

Circular Flow of Economic ActivityCircular Flow of Economic Activity

2. Business Sector2. Business Sector

Product Markets (business): where Product Markets (business): where producers offer goods and services for producers offer goods and services for salesale Sell goods and services to consumers and Sell goods and services to consumers and

receive paymentreceive payment Use payment to pay for factors of productionUse payment to pay for factors of production FOP used to make more goods to sell to FOP used to make more goods to sell to

make more moneymake more money

Circular Flow of Economic ActivityCircular Flow of Economic Activity

3. Government Sector3. Government Sector

Made up of all 3 levels of gov’tMade up of all 3 levels of gov’t Revenue: income gov’t collects for public useRevenue: income gov’t collects for public use

From taxesFrom taxes Expenditure: expense or money spentExpenditure: expense or money spent Purchases goods from product marketsPurchases goods from product markets

Circular Flow of Economic ActivityCircular Flow of Economic Activity

4. Foreign Sector: all countries in world we 4. Foreign Sector: all countries in world we trade withtrade with

Buy and sell goods to and from other Buy and sell goods to and from other countriescountries

Economic Interdependence: we rely on Economic Interdependence: we rely on others, and others rely on us to provide others, and others rely on us to provide goods and servicesgoods and services

Bellringer

What impact does government regulation have on the circular flow model?

4 sentences

The Market Game

The Point of the gameThe Consumers with the most goods and services winsThe Producer with the most money in the end winsDraw the Circular Economic Flow modelLabel each interaction on your model in the correct marketCircle your sector