Economics Chapter 1

Anticipatory Set If you had a genie what are 3 things you would wish for…? If you had a genie what are 3 things you would wish for…? YouTube - I Dream of Jeannie opening YouTube - I Dream of Jeannie opening YouTube - I Dream of Jeannie opening YouTube - I Dream of Jeannie opening

Economics Well, if genies were real we would not need to study economics… Well, if genies were real we would not need to study economics… Economics is a social science that studies how people, acting as individuals and in groups, decide to use scarce resources to satisfy their wants. Economics is a social science that studies how people, acting as individuals and in groups, decide to use scarce resources to satisfy their wants.

Opportunity Cost What are two jobs you would like to have as an adult? What are two jobs you would like to have as an adult? What if you could only pick one? What if you could only pick one? What do you do after school? What do you do after school? Is there anything you would rather do? Is there anything you would rather do? Opportunity Cost is the highest valued alternative given up as the result of making a choice. Opportunity Cost is the highest valued alternative given up as the result of making a choice.

Economics Production is a process that combines economic resources so the result is a good or service that is available for sale Production is a process that combines economic resources so the result is a good or service that is available for sale Distribution is the process of getting a product or service to consumers—before the human want can be satisfied Distribution is the process of getting a product or service to consumers—before the human want can be satisfied Consumption is the use of a product or service that completes the want satisfaction chain. Consumption is the use of a product or service that completes the want satisfaction chain.

Resources There are three types: natural, human, and capital There are three types: natural, human, and capital Natural-the unaltered gifts of nature, such as soil, timber, minerals and fresh water Natural-the unaltered gifts of nature, such as soil, timber, minerals and fresh water Labor-the physical and mental efforts people use to create goods and services Labor-the physical and mental efforts people use to create goods and services Capital- the buildings, tools, and machines people use to create goods Capital- the buildings, tools, and machines people use to create goods ALL OF THESE ADD UP TO THE FACTORS OF PRODUCTION ALL OF THESE ADD UP TO THE FACTORS OF PRODUCTION

Resources The fourth factor of production is often called entrepreneurship. The fourth factor of production is often called entrepreneurship. Entrepreneurship is the imagination, innovative thinking, and management skills need to start and operate a business. Entrepreneurship is the imagination, innovative thinking, and management skills need to start and operate a business.

Scarcity and Opportunity Cost What does the phrase “people are never satisfied” mean to you? What does the phrase “people are never satisfied” mean to you? The gap between peoples wants and the economies resources is called scarcity. The gap between peoples wants and the economies resources is called scarcity. Scarcity=Wants>Available resources Scarcity=Wants>Available resources …the diamond water paradox …the diamond water paradox …professional athletes contracts …professional athletes contracts

Questions: What parts of production does a franchise cover for a business owner? Please use economic terms. Capital, etc Questions: What parts of production does a franchise cover for a business owner? Please use economic terms. Capital, etc Would you ever consider a franchise? Why or Why not? Would you ever consider a franchise? Why or Why not? What aspects of a business do you think they provide that are the most helpful? What aspects of a business do you think they provide that are the most helpful? What are the franchisees struggling with in dealing with McDonald’s? What are the franchisees struggling with in dealing with McDonald’s?

Market – an arrangement that allows buyers and sellers to make exchanges Market – an arrangement that allows buyers and sellers to make exchanges Macro—study of economy as a whole Macro—study of economy as a whole Micro-study of individual tastes Micro-study of individual tastes