UNIT II Economic Resources (Assignment #1)

WARM UP  Make a list of 5 things you really want!!! (Assignment #1)

Scarcity The Economic Problem

SCARCITY Limited Resources

SCARCITY Unlimited Wants

Economics Is…  The study of limited resources but unlimited wants, which forces people to make a CHOICE!

Opportunity Cost  What does it cost you to “attend” this particular “class session”? Think about it! Talk to your partner.

Opportunity Cost  To answer the question, you should have asked yourself what else you could be doing during this time?  Make a list…  Next, prioritize your other activities.

Opportunity Cost  The first item on your list of alternative activities is the opportunity cost of attending this class.  Every activity has a cost - what you gave up.

Opportunity Cost  Because resources are scarce, choices need to be made.  Choice results in cost.  The cost of any choice is what you had to give up.  This is called Opportunity Cost.

Economics: TWO BRANCHES MicroeconomicsMacroeconomics “ Small Picture” “Big Picture” Study of individual Study of the economy units. as a whole. Looking at one thing Concerned with the at a time TOTAL picture Individual decision making Societal decision making

Micro or Macro  Write down the subject of newspaper headlines you did for your current events and determine whether each is a micro or macro issue!!!  Then, discuss with your partner – are they correct??

Economics…  Uses resources to achieve wealth

Types of Resources Goods v. Services –Good -- An item you can see, feel, and touch and that requires scarce resources to produce and satisfies human wants –Services -- Something that is not physical that requires scarce resources to produce and satisfies human wants =>With your partner list 3 Goods & 3 Services…

Four Factors of Production (Resources used to achieve wealth)  Land-natural resources  Labor-an individual providing his/her services for wages  Capital-equipment that can be used for production  Entrepreneurship-someone that uses the first three resources to make a profit. Considered to be a “risk taker” and business leader.

Draw a Tree Map Four Factors of Production LANDLABORCAPITALEntrepreneurship

Determine which of the four factors of production it falls under and place it in the correct place on your tree map:  Computer  Forests  Cab driver  Bakery Store Owner  Petroleum  Automobile  Brain surgeon  Factories  Tractor  Highway system  Radio  Mountains  Small restaurant owner  Minerals  Pencil  Computer software developer  Waitress  Ocean  Fish

Come Up With 3 Examples of Your Own and add it to your tree map  Land:  Labor:  Capital:  Entrepreneur:

Tree Map Collage of the Four Factors of Production  Create a collage that illustrates the four factors of production.  Draw another tree map on your construction paper and label each “branch” as one of the four factors of production.  Find pictures in the magazines that fall under each category.

QUICK QUIZ: (Match the correct term with its definition) 1. Scarcity 2. Entrepreneur 3. Good 4. Labor 5. Economics a.) The study of how people use their scarce resources to satisfy their unlimited wants. b.) All physical and mental effort used to produce goods and services c.) A profit seeker who develops a new product and assumes the risk of profit or loss d.) Limited resources but unlimited wants e.) An item you can see, feel, and touch and that requires scarce resources to produce and satisfies human wants

Due to Scarcity, every Society Must Answer 3 Questions: 1. What goods shall we produce? 2. How shall these goods be produced? 3. For whom should the goods be produced? *These are known as the 3 Economic Questions*

In the U.S. private enterprise must answer the three Qs as follows: 1. WHAT TO PRODUCE? U.S. production leans towards consumer goods & services 2. HOW TO PRODUCE? U.S. believes in private enterprise (corporations and small businesses privately owned) 3. FOR WHOM TO PRODUCE? U.S. production leans towards the large middle class

Survival Activity  Read the Prompt  Answer the Three Economic Questions using the resources provided on the handout with your partner  Write 1 paragraph for each question

Wrap-up  Why does scarcity exist and what does it force us to do?  List the different types of resources and factors of production we discussed today and explain what they help us do.  List the three economic questions and explain why private enterprise must ask ourselves the three questions in the U.S. to make economic decisions.