Your group is building a new zoo. You have to decide what animals to have. Space is limited. You get either 25 or 40 acres. Take 8-10 minutes to make your selections, based on the next slide.

Lion – 1.5 acres Aquarium – 4 acres Giraffe -1 acre Aviary – 4 acres Camel - 1 acre Cheetah - 3 acres Alligator ¼ acre Gazelle – 1 acre Asian Elephant - 2 acres African Elephant acres Reptile House - 3 acres Petting Zoo – 3 acres Kangaroo - 1/2 acre Tiger – 1.5 acres Primate House – 5 acres House of Birds - 5 acres hint:they don’t like being alone *Numbers are acres required for ONE animal (hint: they don’t like being alone!) [If you had 2 of each, it would take over 34 acres–so you will have to make choices.]

1. Why didn't you put one of every animal in the zoo?"

Scarcity - limited quantity of resources to meet unlimited wants Scarcity vs shortage—

Benefits vs. costs (too common): Marginal analysis Thinking at the margin means- deciding about adding or subtracting one additional unit of some resource

3. "Why didn't you have a zoo with only elephants or lions?"

Diminishing marginal utility - utility- (satisfaction received from consumption) The amount of satisfaction derived from each additional unit is less and less.

Believe it or not, you can have too much of something!!!!

4. "Why did you choose an Asian elephant and not an African elephant?"

Benefits vs. costs- the Asian Elephant takes less land

5. "What is the last animal to make the cut for your zoo?"

6. "What is the animal that just missed the cut for your zoo?"

Opportunity cost- the most desirable alternative given up as the result of a decision…. Your second choice

7. What animal did everyone in your group agree to include ___?

8. Would everyone in your group have made the same choices if they did it alone?"

Individual benefits vs. social benefits

1.What is the cost of staying in school? 2.Why do some students choose to drop out of school? 3.Why do most students choose to stay in high school and graduate? 4.What are the future consequences of a decision to drop out of school vs. stay in school?

Economics is all about having to make choices because of limited resources You can draw opportunity cost….it is called a Production Possibilities Curve

Budget Line Number of hamburgers & pizzas that can be bought for $ 30.

Pizzas Industrial Robots Attainable Unattainable A B C D E Economic Growth 1.More/better resources 2.Better technology Now Attainable A’ B’ C’ D’ E’ Production Possibilities Curve

We make choices about what goods and services to produce We have to decide what Resources to use: C E L

Land natural resourcesNature’s items“gifts of nature 1. Land [natural resources] – Nature’s items [“gifts of nature”] In the earth A. In the earth - coal, oil, water, fossil fuels, etc. On the earth B. On the earth – vegetation and water In the atmosphere C. In the atmosphere – sun, wind, and rain starting point [Land is the starting point of all production. “Stuff” “Stuff” from which everything is made... “ Gifts of Nature ” Water Wind Sun Fossil fuels

. Labor human resources“effort” 2. Labor [human resources] {“effort”} “paid work” anyone who works [“paid work”] “brain-power” [Labor is the “brain-power” and “muscle-power” “muscle-power” of human beings] Physical A. Physical – pro athletes & lumberjacks Intellectual B. Intellectual – ministers, doctors & lawyers *Most important resource – 70% of input cost “ Hired Help ”

. Capital Resources “man-made inputs” 3. Capital Resources – all “man-made inputs” used in the (tools, machinery, and physical plants) production process (tools, machinery, and physical plants).

Physical Capital: human made objects used to produce other goods and services Ex: SBISD computer, UPS truck Human Capital: the skills and knowledge gained by a worker through education and experience Ex. Assembly line workers use equipment and skills acquired through training and practice to produce goods

Entrepreneurship starting a new business introducing a new 4. Entrepreneurship – starting a new business or introducing a new product“Sparkplugs” product. “Sparkplugs” who introduce the product or start the new combines land, labor, & capital to produce products business. He combines land, labor, & capital to produce products.