chapter 1 what is economics?
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Chapter 1 What is Economics?. S1: Scarcity and Factors of Production S2: Opportunity Cost S3: Production Possibilities Curves. Bell Work: S1 (10 minutes). Get book, folder, and texts Pick up Chapter 1 and Unit Worksheets 3 hole punch them and place in Folders - PowerPoint PPT PresentationTRANSCRIPT
CHAPTER 1 WHAT IS ECONOMICS?S1: Scarcity and Factors of ProductionS2: Opportunity CostS3: Production Possibilities Curves
BELL WORK: S1 (10 MINUTES)
Get book, folder, and textsPick up Chapter 1 and Unit Worksheets
3 hole punch them and place in FoldersAnswer A – E on Unit 1 Essay Warm-up
Pgs. 29-30
SECTION 1: SCARCITY AND FACTORS OF PRODUCTION Chapter 1 Essential Question
Need to be able to answer this!!“How can we make the best economic choices?” Write at top of S.1 notes
Objectives to learn Why scarcity and choice are the basis of
economics What entrepreneurs do 3 factors of production and differences bt
human/physical economics How scarcity affects the factors of production
KEY TERMS Turn to page 2 Slideshow on Web
http://www.pearsonsuccessnet.com/snpapp/iText/products/0-13-369833-5/Flash/Ch01/Econ_OnlineLectureNotes_ch1_s1.swf
WHY ARE SCARCITY/CHOICE BASIS OF ECONOMICS? How does Scarcity force people to make
economic choices? Makes everyone make choices by making us
decide which options are most important to us Scarcity states there are limited goods/services
for unlimited wants. People need to make choices in order to satisfy m/i
wants People satisfy their needs/wants w/
goods/services People’s needs/wants are unlimited, goods/services are
not
WHY ARE SCARCITY/CHOICE BASIS OF ECONOMICS? Economics begins w/idea that people cannot
have everything they want/need The fact that limited amounts of goods and
services are available to meet unlimited wants is called scarcity. Scarcity forces people to make choices but it is
not the same as a shortage. Shortages are temporary while scarcity always
exists.
WHAT DO ENTREPRENEURS DO? Entrepreneurs play a key role in turning
scarce resources into goods/services Willing to take risks in order to make a profit They:….
Develop original ideas Start businesses Create new industries Fuel economic growth
1st Task is to assemble factors of production Land Labor Capital
FACTORS OF PRODUCTION: LAND Refers to all natural resources used to
produce goods/services Resources include:
Fertile land for farming Oil Coal Iron Water Forests
FACTORS OF PRODUCTION: LABOR Labor is the effort people devote to tasks for
$$ Labor includes:
Medical care provided by a doctor Instruction provided by a teacher Tightening of a bolt by an assembly-line worker Creation of painting by an artist Repair of television by technician
FACTORS OF PRODUCTION: CAPITAL Refers to any human-made resource that is
used to produce other goods/services Economy requires both human/physical
capital Physical
Buildings Equipment Tools
Human College education Training Job experience
BENEFITS OF CAPITAL Key factor for production b/c people and
companies can use it to save time/money Benefits of capital
Increased efficiency Increased knowledge Better time-management Increased productivity
SCARCE RESOURCESCheckpoint: Why are
goods/services scarce? Goods/services are scarce b/c the resources used
to produce them are scarce Only so many natural resources available to
produce goods Labor for production can be limited Physical capital can be limited for many
industries Each resource may have alternative uses
People, businesses, govt.s must choose which alternative they want most
LESSON CLOSING Entrepreneur simulation on Pearson
Class Demonstration Go back and answer the Chapter Essential
Question “How can we make the best economic choices?”
Found on page 4 of Chapter Warm-up A-D
Homework Read Section 2: pgs. 8-12
SECTION 2: BELL WORK
Get books, folders2 Choices;
Grab scratch paper and copy “bubble” chart on pg. 8
Put “bubble” chart at top of S.2 notesAnswer
Questions to captions on pg. 5 and 9Think, pair, share
S.2: OPPORTUNITY COST Guiding Question
How does opportunity cost affect decision making? Write at top of S.2 Notes
Objectives to learn Why every decision involves trade-offs The concept of opportunity cost How people make decisions by thinking @ the
margin Key Terms
http://www.pearsonsuccessnet.com/snpapp/iText/products/0-13-369833-5/Flash/Ch01/Econ_OnlineLectureNotes_ch1_s2.swf
HOW DOES OPPORTUNITY COST AFFECT DECISION MAKING? Every time we choose to do one thing, we are
giving up the opportunity to do another When we make decisions about how to spend
our scarce resources, like money/time, we give up our chance on something else
All indiv’s, businesses, and large groups make decisions that involve trade-offs
Trade-offs involve things easily/not easily measured Money, property, time, and things not easily
(enjoyment or job satisfaction)
HOW DOES OPPORTUNITY COST AFFECT DECISION MAKING? Businesses and Govt. trade-offs
Businesses make trade-offs when they decide how to use their factors of production Famer uses land to plant corn, cannot use same land
to plant soybeans Govt’s make trade-offs when they decide to
spend money on military needs instead of domestic, or vice-versa
Checkpoint: What are trade-offs? Answer economics and you from BW
WHAT IS OPPORTUNITY COST? Most trade-offs have
one of the “rejected” alternatives being more “desirable” than rest
That most desirable alternative given up by the decision is the opportunity cost
HOW DO PEOPLE MAKE DECISIONS Decision making grid
Can help you decide if you are willing to accept the opportunity cost of a choice
Read thru pg. 10 Answer 2 ?s
Thinking @ the Margin When you decide how
much/less to do you are thinking on the margin
Involves comparing opportunity costs/benefits Called cost/benefit
analysis
THINKING AT THE MARGIN Marginal Costs and Benefits
To make good decisions you must weigh the marginal costs against marginal benefits M.Cost = extra cost of adding one unit such as sleeping
or getting one more cookie M. Benefit = extra benefit from adding one unit such as
sleeping or getting one more cookie Once the marginal costs outweigh the marginal
benefit, no more units can (or will) be added Example: 1 more cookie is o.k. b/c it is only 35 more
calories but once the unit cost (calories) exceeds what the benefit (satisfaction) is you will not add anymore.
Best example is how often you tell yourself you can “sleep just ____ much longer” before there is a cost you aren’t willing to put up with
COST/BENEFIT ANALYSIS Read and answer figure 1.1 on making
decisions at the margin Answer the 2 ?s
Decision making at the margin Like opportunity cost, thinking at the margin
applies to businesses/governments as well Employers think @ margin when they decide how
many workers to hire Legislators think @ margin when they decide how
much to increase govt. spending on a project
LESSON CLOSING Trade-off worksheet
Complete and have ready for tomorrow Complete pg. 5: Chapter Essential ?
“Scarcity, choices, and you!” Video to watch while working
Nature of Economics
SECTION 3 BELL WORK
Finish up Trade-off worksheetHave Worksheet ready to go overStart Nature of Economics: 1st 12:00
S3: PRODUCTION POSSIBILITIES CURVES Guiding Question
“How does a nation decide what/how much to produce?” Write at top of S3 notes
Learning Objectives Interpret a PPC Explain how PPC’s show efficiency, growth, and
cost Why a country’s production possibilities depend
on its resources and technology Key Terms
http://www.pearsonsuccessnet.com/snpapp/iText/products/0-13-369833-5/Flash/Ch01/Econ_OnlineLectureNotes_ch1_s3.swf
HOW DOES A NATION DECIDE WHAT/HOW MUCH TO PRODUCE? PPC CURVES!! To help decisions, economists use PPCs as a tool
Curve helps nation’s economists determine alternative ways of using a nation’s resources
Production Possibilities Economists use graphs to analyze choices/trade-offs that
people make To draw PPC, begin by deciding which goods/services to
examine. Refer to graph, pg. 14
Production Possibilities Frontier Line that shows the maximum possible output an
economy can produce Each point reflects a trade-off
Happens b/c factors of production are scarce L, L, and C to make one product means fewer of those to make
the other
WHAT DO PPCS SHOW? Efficiency
PPF represents an economy working at its most efficient level
Economies can work inefficiently, using fewer resources than capable. Underutilization
Growth When an economy grows the curve shifts to right
Production capacity can also decrease, leading to shift left Cost: Can help show the opportunity costs of
Decisions Cost increases as production shifts from making one item to
another Law of Increasing Costs: Refer to Chart pg. 17
Explains as we move along the curve, we trade off more & more for less & less output
TECHNOLOGY AND EDUCATION Technology can increase a nation’s efficiency Govt.’s spend $$ investing in new tech.,
education and training for workforce
Go back and answer Chapter Essential ? How can we make the best economic choices
Finish up any openings up to page 10
LESSON CLOSING Work on Guided Reading Reviews Complete Case Study Fill in Unit 1Body Paragraph
Pg. 31 HW: Ch.1 Study Guide