EagleTime Economics

Terms to Know Capital resources Command economy Consumers Goods Human resources Interdependence Mixed economy Natural resources Physical capital Opportunity cost Trade-off Traditional economy

Terms to Know Scarcity All-or-nothing propositions Services Renewable Non-renewable resources Trade Specialization Market economy

Big Question… As we study this course, keep the following question in mind. How important is planning? (On a sheet of paper, answer the question above.)

These are the unit questions we will examine… How does the government in which you live affect your education and career options? How do your personal choices affect your future? How important is education in predicting future income? Why are budgets important? What are the implications for using credit?

Definitions Capital resources - Tools, machines, and factories used to produce goods. Command economy – This will be defined later. Consumers - Person who buys something to consume or use Goods - Thing that consumers buy

Definitions Human resources - people, especially the personnel employed by a company, institution, etc. Interdependence - mutually dependent; one person depending on another Mixed economy - This will be defined later. Natural resources - the natural wealth of a country, which consists of land, forests, mineral deposits, water, etc.

Definitions Physical capital - non-human assets made by humans and then used in production Opportunity cost – when given a choice, the opportunity cost is the thing(s) you didn’t choose Trade-off - the exchange of one thing for another of about equal value Traditional economy - This will be defined later.

Definitions Scarcity – not having enough of something All-or-nothing propositions – choosing one thing or you get nothing Services - Something someone does for the consumer Renewable resource - any natural resource that can replenish itself naturally over time, such as wood or solar energy

Definitions Non-renewable resources - Something you want that will someday go away Trade - the act of buying, selling, or exchanging commodities Specialization - pursue some special line of study, work, etc. Market economy - This will be defined later.

Basic Economic Questions That All Systems Must Answer What to produce? -Limits -Choices/opportunity costs How to produce it? -Land/labor/capital Whom to produce for?

Another Important Economic Question How to distribute? -Allocation of goods/services -Who makes the decisions about the allocation of resources, methods of production, and the distribution of goods and services?

Types of Economic Systems Traditional Economy System Command Economy System Market Economy System Mixed Economy System

Mixed Economy System contains both privately-owned and state-owned businesses or combines elements of capitalism and socialism, or a mix of market economy and planned economy characteristics includes a degree of private economic freedom (including privately owned industry) mixed with centralized economic planning (which may include intervention for environmentalism and social welfare, or state ownership of some of the means of production)

Traditional Economy System Resources allocated by inheritance Strong social network Use primitive methods and tools to make or grow “income” Strongly connected to: –Subsistence farming –Herding cattle –Hunting and gathering Members often make their own clothing and tools If more food is produced than is needed, they trade the extra for goods made by others. Most common economic system used during prehistoric times Still found today in underdeveloped, agricultural parts of South America, Asia and Africa

Command Economy System involves the production, distribution and consumption of goods and services between different groups in a particular society composed of people and institutions, including their productive resources, such as through the convention of property problems of economics are addressed, such as the problem of scarcity through the allocation of finite productive resources examples of contemporary economic systems include: market systems, socialist systems, and mixed economies

Market Economy System based on the division of labor prices of goods and services are determined in a free price system set by supply and demand market economies do not exist in pure form, as societies and governments regulate them to varying degrees rather than allow self-regulation by market forces

What are goods and services?

Examples of goods and services

Identify Goods and Services Group A:Going to a restaurant Group B:Going to school Group C:Going to the mall Group D:Going to the movies Group E:Going to the library Group F:Going to the hospital Group G:Going to an amusement park Group H:At home

Popcorn Activity

What is scarcity?

Scarce Items Discuss and make a list.

Babysitting Story Read and discuss.

Scarcity Now, that we’ve finished discussing scarcity, go back to your brainstormed list and see if you can 1) categorize items as to who “owns” the scare item and 2) can you add more to your list? Household Business Government Society

Resources…

Is this a renewable or non- renewable resource?

How about this?

Do you want it? Candy exercise

Natural, capital, human resources

Limited Resources… Unlimited Wants and Needs Want – Need –

Limited Resources… Unlimited Wants and Needs What would happen if you had a limited resource and unlimited wants or needs?

Opportunity Cost Choices…Choices…Choices

Opportunity Cost Video

Opportunity Costs Individuals Households Business Government Society

Trade-offs v. All-or-nothing Propositions Trade-offs are common. We make them everyday. Sometimes, we are faced with “all-or- nothing” propositions. That means we have to take all of something or we get nothing. Discuss.