Introduction to IB/AP Economics, Part 2 Fairview High School Paa-Rogers

Communication Shapes Warm-up Partner A – Take out a piece of paper. Sit with your back to the screen. Partner B- Describe the patterns on the screen so that partner A can draw them. Questions?????

Communication Shapes Activity

What did you notice? Partner A? Partner B? Let’s try it again with a new diagram, reversing roles. . . .Ready?

2nd Communication Shapes Activity

What did you notice the second time around? Debrief. . . What did you notice the second time around? How does this relate to being a student? How does this relate to the subject of economics?

Sales in Canada had been flat, how could they improve market share????

Brilliant. . . . A paradigm shift!

How is Econ like Shreddies?

Some Economic Terminology Utility = Satisfaction! Marginal = Additional! Allocate = Distribute! Copyright ACDC Leadership 2015

Paradigm Shift These are a few everyday terms that have different meanings in economics. KNOW the economic meanings!!!!

What’s the price? vs. How much does that cost? Price vs. Cost What’s the price? vs. How much does that cost? Price= Amount buyer (or consumer) pays Cost= Amount seller pays to produce a good Investment Investment= the money spent by BUSINESSES to improve their production Ex: $1 Million new factory Consumer Goods- created for direct consumption (example: pizza) Capital Goods- created for indirect consumption (oven, blenders, knives, etc.) Goods used to make consumer goods

The 4 Factors of Production Copyright ACDC Leadership 2015

The Four Factors of Production ALL resources can be classified as one of the following four factors of production: 1. Land -All natural resources that are used to produce goods and services. (Ex: water, sun, plants, animals) 2. Labor -Any effort a person devotes to a task for which that person is paid. (Ex: manual laborers, lawyers, doctors, teachers, waiters, etc.) 3. Capital - Physical Capital- Any human-made resource that is used to create other goods and services ( Ex: tools, tractors, machinery, buildings, factories, etc.) Human Capital- Any skills or knowledge gained by a worker through education and experience Copyright ACDC Leadership 2015

The Four Factors of Production 4. Entrepreneurship -ambitious leaders that combine the other factors of production to create goods and services. Examples-Henry Ford, Bill Gates, Inventors, Store Owners, etc. Entrepreneurs: Take The Initiative Innovate Act as the Risk Bearers So they can obtain _________. PROFIT Profit = Revenue - Costs Copyright ACDC Leadership 2015

Closure Turn to your econ buddy and explain how the idea of factors of production can be applied to organizing and hosting a school dance. (2 factors per buddy) What is the relationship between Shreddies and a school dance?