+ Bell ringer: Objective: investigate how and why individuals and groups make economic choices. Homework: Scarcity and Factors of Production Homework. Answer: Make a list of what you think went into making the Hershey’s kiss you were given. Some things to think about… - Who made it? - What materials did they use to make it? - What did they need to make the wrapping? To wrap it? - How did it get to the store? The person with the most on their list receives an extra heresy's kiss.

+ HOT Q1: According to economics, why do we need to make choices? Economics: the study of how individuals make choices to satisfy our needs and wants Needs: necessary for survival (food, clothes, shelter) Wants: not things (unlimited) FOR goods and services Goods: physical objects (iPods, corn) Services: actions one person does for another (haircuts, dental check-ups)

+ #1 Problem in Economics: SCARCITY Why do we have to make choices between our wants and our needs? Because we have limited resources Scarcity = limited resources to meet unlimited wants/needs VS. Shortage: TEMPORARY limit in quantity of a resource

+ HOT Q2: How do these choices influence people’s roles within an economic system? The four basic economic questions are: What to produce? How to produce it? How much to produce? For whom to produce it? Consumer = someone who buys a good or service Their Goal: TO SAVE $$ Best way to do this… through COMPETITION (Ex. If Wal-Mart and Best Buy were both selling a DVD, where are you going to buy one? Why?) Producer = someone who makes a good or provides a service Their Goal: THE PROFIT MOTIVE, TO MAKE $$

+ HOT Q3: How are the four factors of production used in satisfying needs and wants? TYPE OF RESOURCE DEFINITIONEXAMPLE Land Renewable: Non-renewable: Labor Capital Human capital: Physical capital: Entrepreneur Factors of production: resources necessary to produce goods and services and satisfy wants/needs

+ HOT Q3: How are the four factors of production used in satisfying needs and wants? The factor of production land includes all natural resources needed to make a product. This can include property or natural materials like wood, oil, et cetera. Some natural resources are renewable resources, meaning they can be replaced. An example of a renewable resource is trees. Other natural resources are non-renewable resources, meaning they cannot be replaced. Examples of non-renewable natural resources are oil and other fossil fuels. Trees can be replaced, but the supply of oil has a limit. LAND

+ HOT Q3: How are the four factors of production used in satisfying needs and wants? Labor is the factor of production that includes workers, or the people needed to create a good. Labor is also known as human capital, or the skills, knowledge, and talents that make a person productive. Some of this potential comes naturally, such as talent for drawing, doing mathematics, or playing a musical instrument. Education, training, and good habits help develop human capital. LABOR

+ HOT Q3: How are the four factors of production used in satisfying needs and wants? Capital includes all manmade materials needed to make a product. These physical goods—machinery, buildings, and raw materials—are also known as physical capital. A car factory is physical capital, and so are all the materials (metal, rubber, etc) that go into making the car. The car itself is a product. CAPITAL

+ HOT Q3: How are the four factors of production used in satisfying needs and wants? The factor of production entrepreneurship refers to the human that efficiently combines land, labor, and capital together to start and run a business. Entrepreneurs operate businesses to make a profit, or the money that remains after they pay for all business costs. Economic profit is the reward for any risks entrepreneurs take. For example, a person might start a business, but they would lose all of their money if the business fails. ENTREPRENEURSHIP

+ ECONOMICS INTRO Notes Cont’d Factors of production = resources necessary to produce goods and services and satisfy wants/needs 1. Land = all natural resources needed to make a product (crops, minerals etc)  Renewable = naturally replaced when used (solar energy, tides, winds)  Non-renewable = run out once used (oil, fossil fuels) 2. Labor = workers, or the people needed to create a good (factory worker, medical personnel, teacher) Human capital = the skills, knowledge, and talents that make a person productive 3. Capital = all manmade materials needed to make a product (ex. machines, money)  Physical capital = another word for capital 4. Entrepreneurship = the human that efficiently combines land, labor, and capital together to start and run a business (ex. Oprah)

+ Look back at the list you brainstormed at the start of the class. Categorize each of the things you came up with “factors of production” as either land, labor or capital, and list them in your poster. Candy Production

+ LAST TASK: Create your own business! Develop a brochure describing a business you want to start. It should have the following sections: COVER: Include a picture, a slogan, and the business name. WHY?: What human want or need will your business fulfill? Why should investors be interested in it?) RESOURCES needed: What resources will you need to have in order to start your business? Give two examples of land, labor, and capital that you will need.( Each) ABOUT THE ENTREPRENEUR: Tell about your interest in opening this business. Why did you choose to sell this product in particular?

+ EXIT TICKET: 1 What are needs? 2 What are wants? 3 What are the 4 factors of production? 4 Which factor of production would natural resources fall under? 5 What is capital? (name 2 types) 6 How does technology affect the number of workers needed? 7 Management skills are which factor of production? 8 How does economics affect us? (name 3 ways) 9 What is the challenge for all economic systems? 10 Who does scarcity affect?