GOAL 7

I. FACTORS OF PRODUCTION-7.1- A. Natural resources/Land-gifts of nature- water, trees B. Capital-equipment, tools-oven, sewing machine C. Entrepreneurship-people that start their business D. Labor-mental and physical work(people)

II (7.1) Goods vs. Services E. Goods-anything purchased that is tangible or touchable 1. Goods-book, cd F. Services-anything purchased that is nontangible 1. Services-manicure, pedicure, oil change

II. Scarcity 7.02: Explain how scarcity influences producers and consumers to make choices A. Scarcity-lack of adequate resources; not enough of B. All people face scarcity C. Producer-maker D. Consumer-buyer

II-7.2-Economics E. Economics-study of how people and governments make decisions in a world of limited resources or scarcity 1. Economic Models-Simplified expressions of the real world-used to predict things in the economy 2. Models help gov’t/people make decisions F. 3 Economic ?’s What to produce? How to produce it? For whom to produce?

II. Scarcity and Needs vs. Wants G. NEEDS-ARE THINGS PEOPLE HAVE TO HAVE TO SURVIVE-WATER, FOOD H. WANTS-THINGS YOU WOULD LIKE TO HAVE-CELL PHONES, RADIOS, CABLE, MP3, IPOD, COMPUTER

III. (7.03) Compare examples of tradeoffs and opportunity costs of economic choices A. Tradeoffs A. Tradeoffs 1. The alternative you face if you decide to do one thing rather than another (know the alternatives) 2. Ex: if buy DVD for $19.99, you trade the chances to buy something else for the same price. Spending more time studying = less time on the phone B. Opportunity Costs 1. Cost of the next best use of your time or money when you choose to do one thing rather than another 2. Not just money, but time

III. (7.3) Costs A. Fixed costs-stay the same-rent, mortgage, car payment B. Variable costs-change-electricity, cell bill, water, C. Total costs-fixed+variable 1. For example-Reggie’s Lemonade Business-fixed cost=80 and variable =60; his total costs=140 D. Marginal costs-the cost of producing an additional item-as long as your profit outweighs cost make the item E. Wages-money earned for your labor

IV. 7.04: Analyze the impact on economic activities of specialization, division of labor, consumption and production increases; 7.05: Explain the impact of investment on human, capital, productive, and natural resources A. Productivity-rate at which goods/services are made/provided 1. upgrade equipment 2. give workers raise; incentives-human capital 3. hire more workers 4. technology 5. expand

6. Specialization-make a certain item/or focus on a particular area-Cardiologists 7. Division of labor-breaking up work into smaller tasks 8. Mass Production-producing large quantities 9. Assembly line-producing an item where each person carries out a specific task 10. Invention-creating a new item 11. Innovation-improve an existing item 12. Robotics-machines do the work 13. Automation-replace human labor with machines(still need humans just not as many)

IV. 7.4 B. GDP- Gross Domestic Product 1. Measures the entire economy’s productivity 2. Per capita GDP calculated by dividing nations total production by the number of workers or number of hours worked. Results = total $ value of all goods/services produced in the nation

IV. 7.4 C. Pricing 1. How the exchange between producer and consumer is regulated. 2. Measure the value of the exchange between goods and services consumers choose to buy

1. Regulate economic activity by finding the price producers will be able to sell all their products to sellers. 2. Set by a balance of the production (supply) and the consumption (demand) Example: 2011 Lamborghini Gallardo $202, Lamborghini Gallardo $202,000 Toyota Corolla-$13,759 Toyota Corolla-$13,759 Wii-$300 Wii-$300