Warm Up – April 26 Answer the following questions on a post it: How do wants and needs effect the choices people make? What is the difference between microeconomics and macroeconomics? What is scarcity? Why will it always exist? What three questions does a producer need to address because of scarcity? What is the difference between a market and command economy? What is a mixed economy? What type of economy does the United States have?

Introduction to Economics Unit 7: The Economy Introduction to Economics

CHOICES Because we have limited resources, we are forced to make choices. TRADE-OFF- Choosing one thing for another. (EX) I have $20, lunch cost $12 and the shirt cost $18…I must make a trade-off. OPPORTUNITY COST- the value of the thing you gave up when making a trade-off. Any time you make a choice, you give something up.

GOODS vs. SERVICES GOOD-something tangible (you can touch it) that fulfills our wants and needs. Ex-Table, Clothes, IPOD, Food SERVICE-something intangible (can’t touch it) that fulfills our wants and needs Ex-Doctor doing surgery, Barber cutting hair, Gardner cutting the grass. Because of scarcity, we must pick and choose how we spend our time and money

TOD – April 26 On the same post-it as the warm up: Read the following story and list all the opportunity costs

Debbie gets up at 6 am takes a shower, eats a bowl of cereal for breakfast, gets dressed, and quickly takes the dog for a walk by the park next to her house. Before she leaves to go to work, Debbie puts the trash and recycling bin out by the curb. She gets in her new car she was able to buy because of her new job which pays much more. Also, because of the weak economy, dealerships are giving great bargains on new cars. She really liked the BMW, but the Toyota was cheaper and she would have more money to go shopping. Debbie drives down the new highway that was just built and goes to the mall. She walks in and out of several stores and sees several things she would like to buy. There is a watch she really likes, but there is also a great pair of boots she had her eyes on, but she doesn’t have money for both. Due to her new job, she also must purchase a new suit, work shirts, and she must buy them because of the dress code. She finally decides on two suits, two shirts, and the watch because she really likes it and it was the last one they had. The cashier rings her up; she hates to see all the sales tax added to her total! Debbie then goes to a restaurant, looks at the menu and decides to get a salad and water for lunch. The waiter is really nice so she gives him a nice tip. Debbie hops in her car and heads home after a successful day of shopping!