AGENDA WELCOME BACK!!! HAPPY NEW YEAR!!! 2. SEATING CHART 3. MAINTENANCE ISSUES *

GOV’T Grades (A-D got you 5 credits!) F’s are EARNED …without credit! MAINTENANCE issues GOV’T Grades (A-D got you 5 credits!) F’s are EARNED …without credit! 5 Bathroom Passes or 50 points! Additional passes will cost you! Expectations for ECONOMICS -Notes -The Economy simulation -Food, Inc. essay -Secret History of the Credit Card essay -Independent work *

Expectations for ECONOMICS MAINTENANCE issues Expectations for ECONOMICS Chapter Tests (4)   40%  Final Exam   10% Participation & Attendance 10% Essay 1 10% Essay 2 10% Midterm Exam 10% Project 10% A = 90-100% B = 80-89% C = 70-79% D = 60-69% F = under 59% *

Think-Pair-Share The person with the longest hair gets to be A, the other B! Take 2 minutes to discuss: What is economics? (A tells B) Name and discuss 2 ways in which the economy impacts your life. (B tells A) Share out with class

Welcome to Economics! What is Econ? Spring 2014 W. Pineda *

3 Branches of Economics *

Calvin Economics! *

So, what is economics? = the social science that studies the production, distribution, and consumption of goods and services . = from the Greek oikonomia, meaning “management of household.” = we will study macroeconomics & microeconomics Social Science is the science of studying all elements related to SOCIETY- history, government aka political science, economy, anthropology, geography, sociology, philosophy, etc. *

Goods & Services Goods Stuff. Services Things people do for others. *

Macroeconomics - The BIG picture Macroeconomics ("large" + "economics") is a branch of economics that deals with the performance, structure, and behavior of the economy of the entire community, either a nation, a region, or the entire world. *

MACRO tries to explain things like? 1. Employment …as well as Unemployment & Underemployment *

2. Development or U n d e r d e v e l o p m e n t Masai Warrior holds Cell Phone instead of traditional gold bar as sign of wealth. U n d e r d e v e l o p m e n t *

3. Globalization *

4. Growth *

5. Technology *

6. Exchange Rates *

Macro Perspective *

“Who Cares?” *

You Do, or should. Why? Environment, Society, & Economy determine our future. *

Microeconomics- The small picture Microeconomics ("small" + "economics") is a branch of economics that studies how households and firms make decisions to allocate limited resources. Examines how these decisions and behaviors affect the supply and demand for goods and services, which determines prices; and how prices, in turn, determine the supply and demand of goods and services. *

MICRO tries to explain things like? 1. Individual Choice MICRO What is best set of choices one can make to be the happiest one can be in life? How to allocate work time and leisure time? What to consume, what to produce? How to be healthy + happy? *

2. Consumption & Saving *

3. Budgeting *

Interesting Question: *

“What’s the wage premium on being really, really good looking?” *

12% Source: Beauty, Gender and Stereotypes: Evidence from Laboratory Experiments, Andreoni and Petrie, Journal of Economic Psychology, Forthcoming. EXAMPLE: Assume both earn €50,000 a year for 40 years OK looking ~ €2m. Really really good looking ~ €4.6m. (Compounding). Ouch! *

What does that mean? *

Average guy: $2m over 40 years *

Good looking guy: $4.6m over 40 years! *

KA CHING!!! *

Economic Terms to Know Shortage Land Labor Capital Scarcity Supply & Demand *

1. Shortage = When there isn’t enough stuff 1. Shortage = When there isn’t enough stuff. Not enough of a product can be supplied or it won’t be supplied. At least not at current prices. If prices go up, it may become profitable for somebody to provide the good or service and that will eliminate the shortage. *

2. Land/Natural Resources All natural resources used to produce goods and services. *

3. Labor Work people get paid for. Necessary to produce goods and services *

4. Capital Human-made resources used to produce stuff or provide services. Note this is different from land, which is natural resources. Two types: Physical and Human. *

Physical Capital = Non-human assets used by real humans in production. Whoa! Check out that physical capital!!! Assets = items of ownership convertible to cash $$$ *

Physical Capital = This includes things like buildings, factories, equipment, computers, paper, copy machines, etc. Modelling and Econometrics Math heavy But useful, can help ask questions in society using real world data. A saleable skill. > 5.1% Salary Premium. *

Human Capital The education, experience, abilities, and knowledge of an employee. These have economic value. Not all labor is equal in value. *

5. Scarcity All resources, goods, and services are limited. Your wants are pretty much unlimited. Even if yours personally aren’t, once you add up everybody in the population, the collective wants are unlimited. This means it’s impossible for all the wants to be met. *

Economics, then, tries to solve the problem of scarcity. This doesn’t mean to make unlimited stuff, but figuring how to distribute scarce, limited stuff in the best way to meet wants. It also wants to see how people satisfy needs and wants by the choices they make. Why Cheetos not Ruffles? *

6. Law of Supply & Demand Demand refers to how much (quantity) of a product or service is desired by buyers. The quantity demanded is the amount of a product people are willing to buy at a certain price; the relationship between price and quantity demanded is known as the demand relationship *

6. Law of Supply & Demand Supply represents how much the market can offer. The quantity supplied refers to the amount of a certain good producers are willing to supply when receiving a certain price. The correlation between price and how much of a good or service is supplied to the market is known as the supply relationship *

The Economy Simulation – Today: form groups Coming Soon: NEXT: The Economy Simulation – Today: form groups Coming Soon: Day 1: Rules of the Game Day 2: Let’s Play! But first, let’s understand the economy further!!! *