Preview Activity Also, I have one homework pass to award one lucky student today. How should we decide who gets it? In your class notes, list as many ideas as you can… Don’t worry if your idea is a little crazy! All suggestions will be considered. Be ready to share!

Economics Intro! Today’s LEQ: What are the basic economic principals?

What is Economics? The study of how people deal with scarcity: unlimited wants, limited resources  For example, why can’t I have everything I want and be anything I want to be?! More specifically, economists study how people seek to satisfy their needs and wants by making choices when dealing with scarcity Make a list… What do you need to survive?

Dissecting the Definition Needs: something like air, food, shelter that is necessary for survival Wants: an item that we desire but that is not essential to survival Based on these definitions, what do we need to cross off our list?

Scarcity Leads to Decision Making Every choice requires a trade-off – you must give something up if you want to get something Whatever you give up is the opportunity cost  For example, what is the opportunity cost of being in class right now?

There are 5 items up for grabs… Rank them in order of how much you’d want them. For example, your 1 st choice would be #1, your last choice would be #5.

Are you smelling what I’m stepping in?: String together the words below to summarize what you just learned. BE READY TO SHARE!  Economics  Needs  Wants  Scarcity  Trade-Off  Opportunity Cost

Activity: BEAD GAME!

How do countries deal with the issue of scarcity? They adopt an economic system: a set of rules by which a nation answers the basic questions:  What to produce?  How to produce?  For whom to produce?

Revisit the Game Instructions! Try to figure out which round represents each economic system!  Market  Command  Traditional

Bead Game Recap  “We Do What We’re Told Ville” = COMMAND  “That’s the Way We’ve Always Done It Ville” = TRADITIONAL  “Make as Much as We Want Ville” = MARKET What to produce? How to produce? For whom to produce?

Bead Game Recap Progress: Is it stressed?  In other words: Does it seem like this economic system is concerned with improving their economy? Choice of Jobs?  In other words: Did you get to pick a job you enjoyed and/or were good at? Or, was it assigned? If so, who assigned it? Motivation to Produce  In other words: What or who motivated you to produce jewelry? How strong was that motivation? How to Produce  What or who told you how to construct the jewelry? What to Produce  What or who told you what to make? For Whom to Produce  How would that economic system decide who got the finished products? Base Values  What was important for each economic system? What were the priorities?

Activity: Categorizing Economic Characteristics

Macroeconomics  Study of economic behavior & decision making of entire economies  Examines major trends for the economy as a whole  Societal decision making is macro (large) Helpful Hint: Think of a BIG MAC to help you remember MACroeconomics looks at BIGger economic topics

Microeconomics  Study of economic behavior & decision making of small units, such as individuals, families, & businesses  Individual decision making is micro (small) Helpful Hint: Think of MICROminimachines to help you remember MICROeconomics looks at “mini” economic topics

Activity: Macroeconomics vs. Microeconomics Identify if each newspaper headline provided deals with a micro or a macro issue.

Factors of Production (a.k.a. Productive Resources) Definition: Anything that’s used to produce something else  Productive resources are limited… Countries also deal with scarcity! Land – natural resources used to make something else Labor – human effort used to produce a good or service Capital – man-made things used in the production of goods Entrepreneurship – the willingness to risk running a new business Video Clip on Resources: kmC2aY2MdcA

My Business Ms. Wynn’s Pizza Shop Land – cheese, tomatoes Labor – pizza maker Capital – pizza oven Entrepreneur – Mrs. Krzyzanowski Now open your own business!

Activity: Open Your Own Business Fold a piece of computer paper so that you have 4 equal quadrants. In the middle, write the name of your business. Label each of the quadrants as the following, and record your information there.  Land  Labor  Capital  Entrepreneur