Economics 11/29/10 OBJECTIVE: First day of school administrative stuff. I. Welcome Back II. Attendance III. Distribution of: -syllabus, points, and test dates -textbooks -desks, coats, floor, & bags -snow days IV. Homework

Last-name, First-nameBook # Describe condition of the book

Important Stuff Web-site: Homework Due Friday 12/3/10 1.) Book covered 2.) Syllabus signed and returned Homework Due Monday 12/6/10 1.) Chapter#1 Homework 2.) Chapter#1 Review

Economics 11/30/10 OBJECTIVE: Examine the fundamental economic problem & the factors of production. I. Journal #1 pt. A -Read “The Global Economy” p.9 -Answer questions (1-3) p.9 II. Journal #1 pt. B -notes on the fundamental economic problem III. Quiz#1 IV. Homework Due Friday! 1.) Book covered 2.) Syllabus signed and returned

The Fundamental Economic problem is: Scarcity - the condition that results from society not having enough resources to produce all the things people would like to have. Economics - the study of how people try to satisfy what appears to be seemingly unlimited & competing wants through the careful use of relatively scarce resources.

Need v. Want Need - a basic requirement for survival & includes food, clothing, and shelter. Want - a way of expressing need.

Scarcity Since people have unlimited wants & limited resources, scarcity leads to choices. 1.) What to produce? 2.) How to produce? 3.) For whom to produce? Ford Rouge Plant

The Factors of Production LAND – the gifts of nature LABOR – people with all their efforts & abilities CAPITAL – the tools, equipment, machinery, and factories used in the production of goods & services ENTREPRENEURS – a risk taker in search of profits who does something new with existing resources

Goods & Services Goods - an item that is economically useful or satisfies an economic want Services - work that is performed for someone Consumer – a person who uses goods & services

Types of goods Consumer good – intended for final use by individuals (personal computer, dishwasher) Capital good – manufactured goods used to produce other goods (robot welder, oven in a bakery, computer in a H.S.) Durable goods – a good intended to last 3 years or more when used on a regular basis (can be both a consumer good or a capital good) Nondurable good – a good that lasts less than 3 years (food, notebook, shampoo)

Goods v. Services The difference between goods and services is that a good is tangible, services are not.

Quiz!

Economics 12/1/10 OBJECTIVE: Examine the paradox of value and the circular flow. I. Journal #2 pt. A -Read the “Business Week Newsclip” p.11 -Answer questions (1-2) p.11 II. Journal #2 pt. B -notes on wealth, circular flow, and Adam Smith III. Homework due Friday! 1.) Book covered 2.) Syllabus signed and returned REMINDER: Chapter#1 Test Monday!

Value, Utility, & Wealth Paradox of Value – some necessities like water have little monetary value, whereas some non-necessities, like gold, has a much higher value. Scarcity is not enough to create value. It must have utility. Utility – the capacity to be useful and provide satisfaction.

Wealth So, for something to have value it must be scarce and have utility. Wealth – the accumulation of those products that are tangible, scarce, useful, and transferable from one person to another. A nations wealth are determined by the total amount of it’s peoples skills (Adam Smith) plus it’s natural resources, capital equipment, stores, houses, and all other tangible assets.

The Circular Flow p.15 The Market – a location or other mechanism that allows buyers and sellers to exchange a certain economic product. Factor Markets – where productive resources are bought and sold. Product Markets – where producers sell their goods and services to consumers.

Read “Profiles in Economics” p.18 -Answer questions (1-2) p. 18

Adam Smith He is the father of Modern Economics He wrote the Wealth of Nations in 1776 In it he said that governments need to stay out of the economy as much as possible. laissez-faire

The Invisible Hand People and business operate in their own self-interest. Competition acts like an invisible hand which will allocate resources to ONLY their most productive uses. Example- if Milewski automotive made cars that exploded after 3,000 miles nobody would buy these defective autos. The company would go out of business freeing up the: -labor used to make the cars -land used in the cars (steel, glass, etc…) -financial capital invested in the company Thus, making these factors of production available to other productive and efficient automakers.

Division of Labor Division of Labor – work is arranged so individuals do fewer tasks than before. Specialization – factors of production perform tasks more efficiently than others. Human Capital – the sum of the skills, abilities, health, and motivation of the people.

Economics 12/2/10 OBJECTIVE: Demonstrate mastery of Chapter#1 vocabulary & EBLI Training Day#1. I. Administrative Stuff -attendance & distribution of quiz II. Quiz #2 – Ch#1 Vocabulary III. EBLI -Evidence-Based Literacy Instruction NOTICE#1: Homework due Tomorrow! -Syllabus & Bookcover NOTICE#2: Homework due Monday! 1.) Chapter#1 sections(1-3) Section Review questions 2.) Chapter#1 Review NOTICE#3: Chapter#1 Test Monday!

Economics 12/3/10 OBJECTIVE: Examine the production possibilities frontier. I. Journal #3 pt. A - Read “Profiles in Economics” p.18 -Answer questions (1-2) p. 18 II. Quiz #3 III. Journal #3 pt. B -notes on trade-offs, opportunity costs, & the PPF IV. Journal #3 pt.C -questions on Econ USA episode#1 V. Homework due Monday! 1.) Chapter#1 sections(1-3) -Section Review questions 2.) Chapter#1 Review NOTICE: Chapter#1 Test Monday!

The Invisible Hand People and business operate in their own self-interest. Competition acts like an invisible hand which will allocate resources to ONLY their most productive uses. Example- if Milewski automotive made cars that exploded after 3,000 miles nobody would buy these defective autos. The company would go out of business freeing up the: -labor used to make the cars -land used in the cars (steel, glass, etc…) -financial capital invested in the company Thus, making these factors of production available to other productive and efficient automakers.

Division of Labor Division of Labor – work is arranged so individuals do fewer tasks than before. Specialization – factors of production perform tasks more efficiently than others. Human Capital – the sum of the skills, abilities, health, and motivation of the people.

Production Possibilities Frontier PPF is a diagram that represents various combinations of goods and/or services an economy can produce when all productive resources are fully employed. P.23

Trade-offs & Opportunity Costs Trade-offs – alternate choices Opportunity costs – the cost of the next best alternative use of money, time, or resources when one choice is made rather than another.

Alternate choices in Mr. Milewski’s Class Example: “I have three passes for the quarter. If I don’t use them, I get 25 extra credit points. If I use one pass I get 15 extra credit points.” Question: What is the opportunity cost of using a pass in Mr. Milewski’s class?

Graphing Choices Passes Extra Credit Remaining Lost

Production Possibilities Frontier PPF is a diagram that represents various combinations of goods and/or services an economy can produce when all productive resources are fully employed. P.23

PPF

Measuring Opportunity Costs Opportunity costs are measured in terms of what you give up. The cost of using a pass in Mr. Milewski’s class is the extra credit you lose. The cost of increasing gun production is the butter you give up.

Opportunity Cost on the PPF

What the PPF Line Represents The line of the PPF shows what is possible if all of the factors of production are fully employed. So, if you have unemployment are you on the PPF? What could cause the PPF to shift outward?

Economic Growth on the PPF

TINSTAAFL There is no such thing as a free lunch Other terminology: Inverse relationship – as one number goes up, the other number goes down Direct relationship – as one number goes up, so does the other number.

Econ U.S.A. episode #1 Please answer the following questions: 1.) Why were American’s standing in long lines for gas during the 1970’s? 2.) Why did Congress debate the fate of the Alaskan Wildlife Refuge? 3.) How did the United States increase production of both guns and butter during WWII?

ACT Prep Science 11/29/10 OBJECTIVE: First day of school administrative stuff. I. Welcome Back II. Attendance III. Distribution of: -syllabus -desks, coats, floor, & bags -snow days IV. Practice Test#1