Decision Making/Factors of Production EQ: Why are some people rich and some people poor?

Review On a sheet of paper with your name: Use the following vocabulary words to help formulate your answers: government, prices, limited, unlimited, wants, needs, scarcity Why must we make choices? What are the three basic questions in economics? How do you think these questions are answered?

Quick Activity With an elbow partner Pretend you are in charge of the entire U.S. economy: What would you produce? How would you produce it? For whom?

The three basic questions in economics WHAT to produce? HOW to produce? FOR WHOM to produce?

What to produce?

What does the U.S. produce?

How to produce?

For whom to produce?

Why can’t we just produce enough stuff for everyone? Because we have to make choices! BECAUSE OF SCARCITY!

So, why do we study economics? Because it helps us become better decision makers!

With a partner… You want to start a business What do you need… um, I mean want to start producing goods and services?

The Four Factors of Production Land – natural resources Labor – people and workers Capital – tools, equipment, machinery, factories, and financial capital (money)… goods used to make more goods Entrepreneurs – risk takers in search of profits (what are profits?) Are these things scarce?

Summary On a sheet of paper, classify each of the following as Land (LD), Labor (LB), Capital (C), or entrepreneurs (e) Doctors Someone that wants to start a record label Sunshine Livestock Tractors Migrant workers Bill Gates Conveyer belts A Forrest Farmland Money Deserts

Production WHAT IS ONE WAY WE MEASURE PRODUCTION IN THE UNITED STATES? When all factors are present – production - the process of creating goods and services can take place! WHAT IS ONE WAY WE MEASURE PRODUCTION IN THE UNITED STATES?

Gross Domestic Product The dollar value of all final goods and services produced within a country’s borders in a 12-month period! What is the GDP in the United States? ~$15 TRILLION

Door ticket 3 – things you learned 2 - things you want to learn more about 1 – question you have