1. An Economic Way of Thinking How can you think like an economist?

2. Hmmm… Why are some people and nations wealthy and others poor?

3. So, Adam Smith has an answer Political Scientist Best known for “The Wealth of Nations” 1776 Connection b/t book & Declaration of Independence (can you tell what it is?) Smith argued: Competition is the key to a healthy economy Nations prosper when buyers and sellers are free to do business in the marketplace without government interference In the newly independent and liberty-loving United States, Smith’s ideas were the talk of the time!

4. Smith’s Observation: “Every man is rich or poor according to the degree in which he can afford to enjoy the necessaries, conveniencies, and amusements of human life.” What’s it mean?

5. Gonna need some paper… When you see the question, write down your thoughts…right off the top of your head. (Got about 2 minutes to write for each one…) Be ready to put your thoughts in the room and share the air!

6. Well, what do you think? 1.If you could choose between two nearly identical products – one that is free and one that you have to pay for – which would you choose? Why?

7. Well, what do you think? 2.If you were opening a new business, would you select a location closer to or farther away from a business that sold similar or even identical products? Why?

8. How many of you chose the free product? How many of you chose the one you had to pay for? Why??

9. How many of you chose to locate your business close to the existing business? How many chose to locate it farther away? Why??

10. For these 2 scenarios, under what circumstances would you choose the option you did NOT select?

11. Economic Thinking… The goal is to get you to think like an economist so you can understand the role that economics plays in various types of decision making. Economics provides a way of looking at and questioning what happens around us. It’s how we can make sense (hopefully) of the world. Hmmm…

12. But first…VOCABULARY! (Oh, joy) Put this handout in the VOCAB section of your binder…put the definitions in YOUR OWN WORDS!! Make it make sense to you… Yup…you will be quizzed on these… Do them on your own time DUE tomorrow (no, I’m not collecting them. You are not babies anymore. Get them done, study em’ before the quiz. No, I don’t know when that will be…and neither will you!)

13. What is Economics All About? Quickly read through the section on your handout titled “What is Economics All About?” Be ready to answer some questions!

14. What is Economics All About? What is an economic enigma? What are some ways the people use limited resources to satisfy unlimited wants? What’s the difference between Positive & Normative Economics?

15. Seven Principles that Guide an Economic Way of Thinking Number off 1 through 7 Based on your number, read the corresponding PRINCIPLE under “What Seven Principles Guide an Economic Way of Thinking?” Work with someone else who read your same section (can be in twos or threes…) to come up with a one-sentence summary of the principle. Be ready to share what you came up with. Pay particular attention to the underlined words!

16. Processing your thoughts… Based on what you know right now, what economic principles help you explain the following enigmas? Pick ONE, talk it over with someone, be ready to put your thoughts in the room. 1.Why do economy seats on airplanes cost different amounts? 2.Why do people pay more for name-brand products when there are generic brands of the same product available for less? 3.Why do police officers get paid so much less than professional baseball players? 4.Why does a five-day Disneyland pass cost only 2.5 times what a one-day pass costs?