CE.11A Economic Vocabulary

Basic Idea important to Economics Goods: Tangible: Things that can be seen and touched Books, pens, salt, shoes, hats, video games Services: Something that are provided by other people Doctors, lawn care, dentists, teachers, barbers, waiters

Can each of us have anything and everything we want? Why can’t we? Easy: There’s not enough of the stuff we want to go around! “Waaaaaaaa!” What?! We can’t?!!

Economics, then, could be defined simply as… Unlimited wants Limited resources versus Get ready ‘cuz I’m gonna limit your resources, pal! But I still want it!!!

Economic Reading Working with your shoulder partner Answer the questions on the worksheets as your introduction to economics When finished, attempt the product from production to market worksheet

Human, capital, natural, entrepreneur When you buy what you want When you make a choice, your opportunity cost is the value of the item you gave up I Bought THIS, so I gave up being able to buy THAT  SCARCITY  Some examples of resources are  Thus, we make choices  Opportunity Cost Here are the decision makers that drive our economy  ConsumersThe people who buy and use goods and services  ProducersThe businesses that make and sell products B18

Scarcity - When there is NOT enough of something for EVERYONE to have - RESOURCES are LIMITED Scarcity means there isn't enough to go around WANTS RESOURCES UnlimitedLimited BUT

Resources What is USED in the PRODUCTION of GOODS and services Resources are what is used to make things Write: Natural, Human, Capital, Entrepreneur Examples of Resources Natural: From the earth Human: Workers Capital: Tools and Money Entrepreneur: Businesses

Thus, we make Choices When you select an item that you want Resources of people and items are limited This usually forces you to decide between stuff you want/need

Opportunity Cost What is given up when a choice is made You buy A, give up the chance to buy B If you buy Product A You gave up buying Product B Opportunity Cost is what did you give up? A person who has $15 can either buy a CD or a shirt. If they buy the shirt the opportunity cost is the CD and if they buy the CD the opportunity cost is the shirt. If there are more choices than two, the opportunity cost is still only one item, never all of them

Consumers When a PERSON uses the goods and services they PURCHASED Consumption is the idea that you will use what you buy!!!

Producers Use RESOURCES to make GOODS and SERVICES Resources Production Products

Warm up: Wed. 3/25/15 What would you do? If you won the lottery and could either invest the money in the stock market or buy a new house, what would you do? Explain your choice? Explain what you gave up for your decision. What is your opportunity cost of each choice?

Think about it… Which of these would be more associated with wealth? How does Production affect price? or

Who is this? I am the one who limits the availability of goods and services! I say that there is an inability to satisfy all wants and needs at the same time. Because of me you must make choices on your wants and needs! Who am I??? a. Mr. Incentives b. Mrs. Production c. Dr. Scarcity d. Ms. Resources

The two foundational ideas of economics: 2. We are making choices based on those values. 1. We are always assigning value to things.

What are these??? They’re each the same thing to all people… But each person values each one DIFFERENTLY!!!

Supply and Demand

Supply How MUCH of something is AVAILABLE Based on the AMOUNT a producer is WILLING to make and PRODUCE Supply is the amount of a good or service that producers are willing and able to sell at a certain price.

Demand How MUCH of something that people are willing to BUY at a CERTAIN price How much WILL people BUY? How much do people demand an item Will a company sell a product if no one wants it?

How Mr. Hixson paid for almost a year of college When the PS3 was first released it was $600. Sony only released about 10 per store Demand was HIGH! Supply was LOW So he bought 3 #1: ~$ #2: ~$ #3: ~$ = ~$ = $ = Profit!

Incentives Things that MOTIVATE us to BUY Examples: SALES, COUPONS, deals Incentives are what makes you want to buy something

Choice Making a decision Decisions are important because resources are limited!

Price How much something costs Supply and Demand determines price How much are people willing to pay?

SUPPLY DEMAND PRICE QUANTITY Graph your Equilibrium, highest price people would pay

Exit Ticket Write the vocabulary word that applies to each of these ideas. 1. ___________ will determine how much something costs if there is too much of a product available 2. We have unlimited wants, but limited resources, this results in _____________ 3. Human, capital, and natural are examples of __________ 4. The value of the item you gave up is known as your _________________ 5. ___________ is when a person uses the item they have purchases

Design a T-Shirt We are going to do a marketing activity that will show you how businesses decide how much to charge for a product. You will have to determine the price after you do some market research about what people are willing to pay for your shirt Sport wear!! Basic Costs (Everyone) T-shirt = $5 Labor = $1 Extra’s (Add to cost of Shirt) Sport Fabric = +$2 Color = +.50 for each color included Image/Logo = +$1 for each one (doesn’t matter size) WRITE YOUR TOTAL COST OF THE PRODUCT ON THE BACK!!! NOT FRONT