Advanced Placement Microeconomics Daily: What guides your decisions more, positive analysis or normative analysis? Which goal is more important to you equity or efficiency? Explain each. Have out Chapter Questions!!!

How Do We Deal With our Basic Economic Problems? We know that we have to make choices. What do we actually make choices with? What questions do we ask ourselves? Why do we do it that way? The answers to these are the basis for Microeconomics. How do small units make choices?

The Three Basic Questions 1.What To Produce? This depends greatly on what consumers want. 2.How To Produce? The resources that are available dictate production. 3.For Whom To Produce? The final product will go to the consumers willing to pay the price.

Resources Those things that we use to produce, also called the Factors of Production. They fall into three basic categories: –LAND –LABOR –CAPITAL GOODS All Organized by an ENTREPRENEUR

Factors of Production LAND:gifts of nature, not man-made Make a list of ten examples of natural resources used in production; Ex) wood, iron, petroleum, water, quartz, sunlight, livestock, plants, etc. etc. etc.

LABOR: human efforts, abilities and/or skills; includes both blue and white collar Make a list of ten labor positions used in production Ex) teacher, doctor, mechanic, mailman, factory worker, farmer, etc… Factors of Production

CAPITAL: manmade tools and equipment used to produce other goods or services Financial Capital: the money used to buy capital goods used in production Make a list of ten capital goods used in production Ex) computer, telephone, hammer, oven, projector, pen, etc…

Factors of Productions Entrepreneurs: risk-takers hoping to achieve a profit from either inventing a product or starting a business Make a list of ten real life entrepreneurs Ex) Bill Gates, Thomas Edison, Henry Ford, Dave Thomas, etc…

Turning Inputs into Outputs Consumer Good: item intended for final use by consumers rather than firms. Our main points of this course will study: EntrepreneursOUTPUTS INPUTS+ = Costs and availability of Inputs and Outputs Who gets the inputs and outputs?

HOMEWORK Read the Article about the Apple iPhone and answer the questions that follow. The Questions will utilize the notes we took today. Due next class!!!

Top Ten Fun Get your index card numbered 1 – 10 and be ready!!!! Your Category is…..

The Top Ten Most Common Words Spoken in English 10.Do 9. Not 8. A 7. Have 6. It 5. And 4. You 3. I 2. The 1. Be