1 Limits, Alternatives, and Choices BUT LIMITED OR SCARCE RESOURCES! SOCIETY HAS UNLIMITED WANTS...

Slides:

Advertisements

Similar presentations

Chapter 1: Alleviating Human Misery. Goods & Services Commodities we use to satisfy our needs and wants Goods are tangible commodities we use (things.

Advertisements

CHAPTER 2 The Economizing Problem

The Production Possibilities Curve

CHAPTER 1 LIMITS, ALTERNATIVES, AND CHOICES

Unit 1: Basic Economic Concepts

Copyright 2008 The McGraw-Hill Companies Limits, Alternatives, and Choices.

Copyright 2008 The McGraw-Hill Companies 1-1 Chapter Objectives Economic Perspective Theories Principles and Models Macro and Microeconomics Individual’s.

Chapter 1 Limits, Alternatives, and Choices McGraw-Hill/Irwin

1 C H A P T E R What Is Economics?.

Marginal Analysis  Comparing benefits and costs.  Marginal – means “extra, additional, one more”  Marginal Cost (MC) – What does it cost to go to the.

Fundamentals of Microeconomics Introduction to Economics.

2 - 1 Copyright McGraw-Hill/Irwin, 2002 The Foundation of Economics Employment and Efficiency Unemployment, Growth, and the Future Economic Systems The.

01 Limits, Alternatives, and Choices

2 - 1 The Foundation of Economics Factors of Production Employment and Efficiency Production Possibility Curves Economic Systems The Circular Flow Model.

The Economizing Problem 2 C H A P T E R 1 The foundation of economics is the economizing problem: wants are unlimited while resources are limited or.

Macro Chapter 1 Presentation 3. Quick Check #1 The idea that the limited amount of resources are never sufficient to satisfy people’s virtually unlimited.

Economics 12 Chapter 1 Notes.

Scarcity, Opportunity Costs, and Production Possibilities Curves: Reviewing Chapter 2 through the Homework.

Chapter 1: The Nature and Methods of Economic Definition of Economics The social science concerned with the efficient use of limited or scarce resources.

The Economizing Problem Economic Systems Lecture 3 & 4 Dominika Milczarek-Andrzejewska.

Or… Production Possibilities Curve (PPC ) Production Possibilities Frontier (PPF)

Unit 1: Basic Economic Concepts 1. Society has unlimited wants but unlimited resources The Economizing Problem… Scarcity WE HAVE A PROBLEM!! 2.

Unit 1: Basic Economic Concepts 1. REVIEW 1.Explain relationship between scarcity and choices 2.What is different between positive & normative 3.What.

1 - 1 Unit 1 Introduction to Economics Economics The social science concerned with the efficient use of scarce resources to achieve the maximum.

Production and Trade Production Possibilities, Comparative and Absolute Advantage, Specialization and Trade, Circular Flow, Invisible Hand.

 Economic problem  Limited Income  Unlimited Wants Chapter 1, LO51©2013 McGraw-Hill Ryerson Ltd.

Did you know? As you watch the video, make a mental note of one of the facts. How does it effect the economy? We will discuss this! Did you know?

Macro Chapter 1- Presentation #2. Production Possibilities Table Lists the different combinations of two products that can be produced with a specific.

CHAPTER TWO NOTES AP I.FUNDAMENTAL FACTS OF ECONOMICS A. UNLIMITED WANTS 1. ECONOMIC WANTS ARE DESIRES OF PEOPLE TO USE GOODS AND SERVICES THAT PROVIDE.

The PPC . Because resources are scarce, economies cannot have an unlimited output of goods and services. So, societies must choose which goods and services.

# McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Limits, Alternatives, and Choices 1.

Chapter 1: The Nature and Methods of Economic Definition of Economics The social science concerned with the efficient use of limited or scarce resources.

1 Limits, Alternatives, and Choices.

Unit 1: Basic Economic Concepts

CHAPTER 1.  1. Land ◦ Anything that is a “gift of nature” i.e. whale  2. Labor ◦ The physical and mental talents that go into producing a good or service.

1 Limits, Alternatives, and Choices McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

LO DVDs $20 Books $10 $120 Budget Quantity of Paperback Books Quantity of DVDs Income.

Production Possibilities Curve A curve that shows the different combinations of two goods that the economy can produce, given its resources and the level.

MICROECONOMICS: CHAPTER TWO ● The Economic Problem: Scarcity, Wants, and Choices.

01 Limits, Alternatives, and Choices McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

The Economizing Problem 2 C H A P T E R The foundation of economics is the economizing problem: society’s material wants are unlimited while resources.

Copyright 2011 The McGraw-Hill Companies 1-1 Chapter Objectives Economic PerspectiveEconomic Perspective Theories Principles and ModelsTheories Principles.

 Illustrates production choices  Assumptions:  Full employment  Fixed resources  Fixed technology  Two goods ©2013 McGraw-Hill Ryerson Ltd. Chapter.

An Exercise in Connecting the Dots Today, over 1 billion people in the world go hungry while over 1 billion people are overweight. How do you explain.

 Economics is defined as the social science concerned with the efficient use of scarce resources to achieve the maximum satisfaction of economic wants.

Chapter 1: Limits, Alternatives, and Choices McGraw-Hill/IrwinCopyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Micro Unit I Review Mr. Griffin AP Econ MHS Micro Unit I Study Guide Economic Systems Economizing Problem Circular Flow Model Opportunity Costs PPCs.

1 Limits, Alternatives, and Choices McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Unit 1: Basic Economic Concepts

Limits, Alternatives, and Choices

Chapter 1 Limits, Alternatives, and Choices McGraw-Hill/Irwin

The Economizing Problem

LIMITS, ALTERNATIVES, AND CHOICES Pertemuan 1

Unit 2: Basic Economic Concepts

An Introduction to Economics #2

Production and Trade Production Possibilities, Comparative and Absolute Advantage, Specialization and Trade, Circular Flow, Invisible Hand.

Introduction to Economics

The Economizing Problem part 1

Economic systems The way a society organizes to produce, distribute, and consume goods. Economic systems try to prevent surpluses (having too much of a.

01 Limits, Alternatives, and Choices

01 Limits, Alternatives, and Choices

PowerPoint #2: Factors of Production

Basic Economic Concepts (Continued…)

1 Limits, Alternatives, and Choices

The Economizing Problem

The Economizing Problem

PowerPoint #2: Factors of Production

Chapter 2: The Economizing Problem

1 Limits, Alternatives, and Choices.

01 Limits, Alternatives, and Choices

Presentation transcript:

1 Limits, Alternatives, and Choices

BUT LIMITED OR SCARCE RESOURCES! SOCIETY HAS UNLIMITED WANTS...

Individual’s Economizing Problem Limited Income Unlimited Wants Tradeoffs Choice

DVDs $20 Books $ $120 Budget Income = $120 P dvd = $20 = 6 Income = $120 P b = $10 = 12 Attainable Unattainable Quantity of Books Quantity of DVDs

Society’s Economizing Problem Scarce Resources Resource: –Land –Labor –Capital –Entrepreneurial Ability Factors of Production

LAND SCARCE RESOURCES ECONOMIC RESOURCES

LAND CAPITAL SCARCE RESOURCES ECONOMIC RESOURCES

SCARCE RESOURCES ECONOMIC RESOURCES Notes... FINANCIAL CAPITAL REAL CAPITAL

LAND CAPITAL LABOR SCARCE RESOURCES ECONOMIC RESOURCES

LAND CAPITAL LABOR ENTREPRENEUR SCARCE RESOURCES ECONOMIC RESOURCES Factors of Production

RESOURCE PAYMENTS RENT INTEREST WAGES PROFIT LAND CAPITAL LABOR ENTREPRENEUR

Production Possibilities Model 1- Full Employment 2- Fixed Resources 3- Fixed Technology 4- Two Goods

A Consumer Good PIZZA PRODUCTION POSSIBILITIES

Robots And a Capital Good

Using all resources, to get some pizza, we must give up some robots! We can only produce 10,000 Robots or 400,000 Pizzas PRODUCTION POSSIBILITIES

PIZZA (in hundred thousands) ROBOTS (in thousands) PRODUCTION POSSIBILITIES

PIZZA01234 (in hundred thousands) ROBOTS (in thousands) Robots (thousands) Pizzas (hundred thousands) PRODUCTION POSSIBILITIES

PIZZA01234 (in hundred thousands) ROBOTS (in thousands) Robots (thousands) Pizzas (hundred thousands) PRODUCTION POSSIBILITIES

PIZZA01234 (in hundred thousands) ROBOTS (in thousands) Robots (thousands) Pizzas (hundred thousands) PRODUCTION POSSIBILITIES

PIZZA01234 (in hundred thousands) ROBOTS (in thousands) Robots (thousands) Pizzas (hundred thousands) PRODUCTION POSSIBILITIES

PIZZA01234 (in hundred thousands) ROBOTS (in thousands) Robots (thousands) Pizzas (hundred thousands) PRODUCTION POSSIBILITIES

PIZZA01234 (in hundred thousands) ROBOTS (in thousands) Robots (thousands) Pizzas (hundred thousands) PRODUCTION POSSIBILITIES

A full-employment, full-production economy must sacrifice some of product X to obtain more of product Y. PRODUCTION POSSIBILITIES

Q Q Robots (thousands) Pizzas (hundred thousands) A B C D E W Attainable but Inefficient Unattainable Attainable & Efficient PRODUCTION POSSIBILITIES Z

Q Q Robots (thousands) Pizzas (hundred thousands) A B C D E W Attainable but Inefficient Unattainable Attainable & Efficient LAW OF INCREASING OPPORTUNITY COSTS The amount of other products that must be sacrificed to obtain 1 unit of a specific product is called the opportunity cost of that good.

Q Q Robots (thousands) Pizzas (hundred thousands) A B C D E W Attainable but Inefficient Unattainable Attainable & Efficient PRODUCTION POSSIBILITIES A graph of the production possibilities curve will be CONCAVE Economic resources are not completely adapt- able to other uses.

Q Q Robots (thousands) Pizzas (hundred thousands) U Unemployment & Underemployment Shown by Point U More of either or both is possible PRODUCTION POSSIBILITIES

Q Q Robots (thousands) Pizzas (hundred thousands) U Unemployment & Underemployment Shown by Point U More of either or both is possible PRODUCTION POSSIBILITIES Notes... Economic Growth 1 – Increase in resource supplies 2 – Better resource quality 3 – Technological advances

Economic Growth –Increasing Resource Supplies –Increasing Resource Quality –Technological Advances

Pizzas Industrial Robots Attainable Unattainable A B C D E Economic Growth Now Attainable A’ B’ C’ D’ E’ Production Possibilities Curve

Pizzas Industrial Robots Under or Unemployment Unattainable A’ B’ C’ D’ E’ Production Possibilities Curve U

Key Terms economics opportunity cost microeconomics positive economicspositive economics normative economicsnormative economics economizing problemeconomizing problem budget line factors of productionfactors of production consumer goods capital goods production possibilities curveproduction possibilities curve law of increasing opportunity costslaw of increasing opportunity costs economic growth economic resources land labor capital Entreprene- urial ability