Bell ringer # 1 How many choices do you make in a day? estimate

Introduction to Economics

A nation of couch potatoes! What is the number one New Year’s resolution made each year by thousands of Americans? Which well known people do Americans admire the most? What is the current status of exercise habits of Americans?

True or False Few Americans know that exercising more and eating less can help many people become healthier. (False) Exercise and a healthful diet are free. In jobs that involve physical work, exercise is like a fringe benefit. (True)

True or False The price of food has been increasing. Passive modes of entertainment — like television and video games — are popular with many Americans. (True) Common jobs in the past — in mining, farming, and manufacturing, for example — were much safer than today's jobs in technology, law, and finance.

Introduction to Economics

Introduction to Economics What is economics and why should we study it? Economics is the study of how individuals and societies make choices about ways to use scarce resources to fulfill their wants. Economics is broken down into two divisions. Microeconomics Deals with decision-making by small units such as individuals and firms. Macroeconomics Deals with decision-making by large units such as governments and the economy as a whole.

Introduction to Economics What are the scarce resources??? Factors of Production Land natural resources, surface land, and water. Labor human effort directed towards producing goods and services. Capital the buildings, equipment, and human skill used to produce goods and services. Entrepreneurial Ability managerial and organizational skills needed to start a firm, combined with the willingness to take risks.

Introduction to Economics We all have them… wants and needs Need Anything that is essential to survival. Want The extras or luxuries of life.

Introduction to Economics Needs Food Water Shelter Clothing Wants Pizza, cheeseburger Coke, Sweet tea 5 bedroom home Aeropostale, Old Navy

Introduction to Economics We all have 4 basic needs, how many wants do we have?? Why can’t we have everything we want? We all have 2 basic limited resources that prevent us from having everything: Time Money

Introduction to Economics Scarcity The condition of not being able to have all of the goods and services one wants. Scarcity always exist because wants will always exceed resources.

Introduction to Economics What about the temporary lack of resources? Shortage A temporary situation in which goods and services are unavailable. Hurricanes War Freezing temperatures Shortage vs. Scarcity Shortages are temporary, scarcity always exist.

Introduction to Economics

Introduction to Economics Since our resources are limited and we have so many alternatives, we have to consider our costs when we make choices. Opportunity Cost The value of the best alternative forgone when an item or activity is chosen. Trade-off Sacrificing one good or service to purchase or produce another.

Introduction to Economics What are goods and services? Goods A tangible item used to satisfy human wants. Services An activity used to satisfy human wants.

How do countries/Firms decide what they need to produce? Productions possibilities frontier Graph showing the maximum combinations of goods and services that can be produced from a fixed amount of resources in a given period of time. Classic example is Guns or butter.

Guns and Butter Either government can use resources to produce military goods or consumer goods. Government must make a trade-off.

Unattainable Inefficient use of resources underutilization

Introduction to Economics What does it mean on the news when they say the economy is bad? Economy The production and distribution of goods and services in a society.

Introduction to Economics Economist Someone who researches and collects data to build models to show how the world works. Economic Model A simplified representation that helps explain and predict economic behavior in the real world.

Additional terms Human capital Physical capital Thinking at the margin Efficiency Underutilization Cost Law of increasing costs

Pg. 6 questions 1-6 Pg. 11 questions 1-4 Pg. 18 questions 1-3 YOU DO NOT HAVE TO WRITE QUESTIONS

What do you think the term economy is referring to? Bell Ringer # 3 What do you think the term economy is referring to?

Jon and his 20 hours a week If he chooses to work at Burger Boy for those 20 hours @ $8/hr. Financial Implication Social Implication Immediate Effects If he chooses to go out for track (6 hours) and work in the library for 14 hours @ $6/hr.

Alternatives and Choices Samantha’s alternatives Possible costs Possible benefits

Alternatives and Choices Otto’s alternatives Possible costs Possible benefits

Unattainable Inefficient use of resources

Bell Ringer # 3 What are your incentives for finishing high school? Are there incentives for good grades? If so, what are they? Are there any incentives that would personally motivate you to do better than you currently are? If so, what are they?

Kidney Activity

Dr. M Bonnie T. Fred S. Ellen R. Agnes M. 2 years after the transplant he has a massive heart attack and dies. Bonnie T. After the transplant she goes to medical school to become on obstetrician. Fred S. He quit medical school and divorced his wife. Ellen R. She became a lawyer working to defend the poor. Agnes M. She won the state lottery and became an instant millionaire.

What is the difference between a want and a need? Bell Ringer # 4 What is the difference between a want and a need?

The town of Longford has a population of 2,959 and two factories The town of Longford has a population of 2,959 and two factories. One factory produces wooden puzzles; the other produces ball bearing used in aircraft. Together these two companies employ 165 workers. Both factories would like to purchase the 30-acre Grove Woods, which is owned by the town, in order to expand their facilities. When the town decides which business to sell the land to, it will consider how the sale might affect the residents.

If the puzzle factory purchases the land, its expansion would create 30 new jobs. The ball bearing factory would only create 20 new jobs, but it would set some of the land aside for a playground for the town.

John’s Dilemma Work all 20 hours for $8/hr. Financial impact Burger Boy Library/Track Work all 20 hours for $8/hr. Financial impact Social impact Immediate impact 6 hrs. for track and 14 hrs. working in the library for $6/hr. Financial impact Social impact Immediate impact

Bell Ringer # 2 Does having more alternatives make choosing easier or harder? For instance, restaurants/fast food places, brands of shoes, clothes, etc.