Economic Resources {WARM UP} Make a list of 10 things you want!!!

Scarcity The Economic Problem

SCARCITY Limited Resources

SCARCITY Unlimited Wants

Economics Is…  The study of limited resources but unlimited resources, which forces people to make a CHOICE!

Opportunity Cost  How much does it cost you to “attend” this particular “class session”? Think about it! Before going on, try to come up with an answer to this question. Talk with a partner.

Opportunity Cost  To answer the question, you should have asked yourself what else you could be doing during this time?  Next, prioritize all of these other activities.

Opportunity Cost  The first item on your list of alternative activities is the opportunity cost of attending this class.  Every activity has a cost - what you gave up.

Opportunity Cost  Because resources are scarce, choices need to be made.  Choice results in cost.  The cost of any choice is what you had to give up.  This is called Opportunity Cost.

Economics: TWO BRANCHES MicroeconomicsMacroeconomics “ Small Picture” “Big Picture” Study of individual Study of the economy units. as a whole. Looking at one thing Concerned with the at a time TOTAL picture Individual decision making Societal decision making

Micro or Macro  Write down the subject of newspaper headlines you did for your current events and determine whether each is a micro or macro issue!!!

Four Factors of Production  Land-natural resources  Labor-an individual providing his/her services for wages  Capital-equipment that can be used for production  Entrepreneurship-someone that uses the first three resources to make a profit. Considered to be a “risk taker” and business leader.

Draw a Tree Map (Assignment #2 -- continued) LandLaborCapitalEntrepreneurship

Draw a Tree Map FOUR FACTORS OF PRODUCATION LandLaborCapitalEntrepreneurship

Determine which of the four factors of production it falls under:  Computer  Forests  Cab driver  Bakery Store Owner  Petroleum  Automobile  Brain surgeon  Factories  Tractor  Highway system  Radio  Mountains  Small restaurant owner  Minerals  Pencil  Computer software developer  Waitress  Ocean  Fish

Come Up With 3 Examples of Your Own and add it to your tree map  Land:  Labor:  Capital:  Entrepreneur:

Tree Map Collage of the Four Factors of Production  Create a collage that illustrates the four factors of production.  Draw another tree map on your paper and label each “branch” as one of the four factors of production.  Find pictures in the magazines that fall under each category.

Due to Scarcity, every Society Must Answer 3 Questions: 1. What goods shall we produce? 2. How shall these goods be produced? 3. For whom should the goods be produced? These are known as: “The 3 Economic Questions”

In the U.S. the three Qs are answered as follows: 1. WHAT TO PRODUCE? U.S. production leans towards consumer goods & service 2. HOW TO PRODUCE? U.S. believes in private enterprise (corporations and small businesses privately owned) 3. FOR WHOM TO PRODUCE? U.S. production leans towards the large middle class