Please copy down the four questions. Thanks! Warm up – 8.11.17 (Friday) Please copy down the four questions. Thanks! What is the marginal benefit of one police officer? What is the marginal cost of one police officer? What is the marginal benefit of the 7th police officer? What is the marginal cost of the 7th police officer?

Standard for the day: Explain that rational decision occurs when the marginal benefits of an action equal or exceed the marginal cost

Essential Question for the day What does it mean to think at the margin?

Upcoming Assessments Upcoming quiz will be on Thursday, August 11, 2016. It will cover standards Economic Fundamentals 1 and 2. Please put this date on your calendar. Thanks.

RATIONAL DECISION MAKING

Rational Decision Making Analyzing costs and benefits before making a decision MARGINAL thinking is key What is the cost/benefit of my NEXT decision Past decisions don’t matter this affects PRODUCERS AND CONSUMERS A rational decision is made when the marginal benefit is equal to or greater than the marginal cost

Costs and Benefits For producers, this is simply measured in dollars Marginal costs of the inputs vs. marginal revenue For consumers, it is trickier We measure benefits in terms of UTILITY How “useful” is the item or service We use “utils” as the measure for this

Another example A person opens a business making sandwiches. He’s purchased a store and all of the food products, now he wants to hire some people. He decides to hire two people to start with and pay them $50 a day. His costs/benefits sheet for a month looks like this:

Rent/Food/Entrepreneurship = $750 1 Month Rent/Food/Entrepreneurship = $750 Worker # Cost Production Price/Sand 1 $750 250 sandwiches 5 2 Total Costs: 750+1500=2250 Total Output: 500 x 5 = 2500

Should he hire worker #3? Why? 1 Month Rent, Food, Entrepreneurship - $750 Worker # Cost Production Price/Sand 1 $750 250 5 2 3 200 4 100 Should he hire worker #3? Why? What about #4? Why?

Please copy down the four questions. Thanks! Warm up – 8.15 (Tuesday) Please copy down the four questions. Thanks! What is the title of the news article? What is the purpose of the incentive in the article? Is this a positive or negative incentive? Do you think this incentive will be effective in its goals? What is the source of this incentive?

Standard for the day: Explain that people, businesses, and governments respond to positive and negative incentives in predictable ways.

Essential Question for the day Do positive and negative incentives work?

Essential Question for the day Do positive and negative incentives work?

Activity for the Day Today you move will around the class room in groups of 3 or 4. Each group will read 4 recent news articles about incentives. Each group will determine if the incentive in the article is a positive or a negative incentive. Then you will decide if that incentive will be effective or not. You will have about 8 minutes per news article to read and discuss.

Please copy down the five questions. Thanks! Warm up – 8.16 (Wednesday) Please copy down the five questions. Thanks! Who is considered to be the first modern day economist? What did Adam Smith say that people can do to make themselves better off? What percentage of the world’s airplanes does the USA produce? What are some of the problems with international trade? Which countries have benefited from open trade?

Standard: SSEF3.a Give examples of how individuals and businesses specialize.

Essential Questions How does trade and specialization benefit the consumer?

What is specialization? .. when an someone specializes in doing one part of a task, and relies on others to complete the other parts.

Specialization A division of labor occurs when production is broken down into separate tasks with different workers performing each task.

Specialization A country’s specializations are shown by its exports. The exports are the goods and services it produces and sells abroad.

Specialization Most people consume little of what they produce and produce little of what they consume!

Benefits of Specialization

Benefits of Specialization Specialization allows for greater production. higher living standards than otherwise possible.