1. Warm UP #1 UNIT 6: Principles of Economics 1. Define: Limited Jurisdiction 1. provide two examples of cases that would be heard under limited 2. Define: General Jurisdiction 1. provide two examples of cases that would be heard under general 3. What are the major differences between CIVIL and CRIMINAL cases?

3. Economics The study of how we make decisions in a world in which resources are limited as well as the study of how things are made, bought, and sold.

5. Microeconomics v. Macroeconomics Micro= looks at the decision making of small units such as individuals and businesses Macro- looks at the big picture, deals with the economy as a whole & decision making by large units such as governments, whole industries, or societies.

7. Economic Model Model- theory that tries to explain human economic behavior. An economic model is a simplified description of reality, designed to yield hypotheses about economic behavior that can be tested.

8. Economic Systems Economic System- is the system of producing and distributing of goods and services and allocating resources in a society. It includes the combination of the various institutions, agencies, & consumers that make up the economic structure of a given community/country The study of economic systems includes how these various agencies and institutions are linked to one another, how information flows between them, and the social relations within the system. In simple terms: How a society organizes its economy Example: Free Enterprise Capitalism ( business are allowed to compete for profit with limited gov. interference US Economic System

10. The Problem of Scarcity https://www.youtube.com/watc h?v=otrpxtAmDAk https://www.youtube.com/watc h?v=otrpxtAmDAk The scarcity (limits) of resources forces people to make careful economic decisions. Resources- things used in making goods and providing services. Include; tools, natural resources (wood, soil, oil water), and human resources( people who provide labor, skills, knowledge) Scarcity happens when we don’t have enough resources to produce all the goods we want/need.

12. Cost v. Benefit & Trade-offs Because there is scarcity we must take into account the costs and benefits of our decisions/ actions. Trade-offs occur when we sacrifice one thing to obtain another. Our choices are made based on the information that we have at the time of making the decision. Perceived value of trade-off can go up or down depending on the circumstances.

13. If you had one hour of free time tonight to do whatever you want to do (within reason) what would you do? Write down 3-4 things Put a star next to your first choice and circle your 2 nd.

14. Opportunity Cost Trade-offs create opportunity costsopportunity costs Whenever you make a trade-off, the thing that you do NOT choose is your opportunity cost. Opportunity Cost= the value of what you gave up, your 2 nd choice’s value Not just $; time, experiences To butcher the poet Robert Frost, opportunity cost is the path not taken (and that makes all the difference). You bought that bike? Then the snowboard was your opportunity cost. You worked that weekend? Spending time with your family is the opportunity cost.

15. 2 types of costs that contribute to any activity; explicit and implicit. Explicit cost=payments that we make for goods and services out-of-pocket. $$$$$$$$ Implicit cost=the opportunity cost of using resources we already own. (Time or Resources) Have a closet so full of junk you can’t fit any more new clothes? The cost of not being able to fit more clothes is an implicit cost Going to college away from home? Now you can’t play with your doggie every day. Or you can’t work a full time job and you’re broke.

16. Costs All businesses have cost(expenses), but not all cost are the same type. Fixed- the same no matter how many units of a good are produced,(rent, taxes examples) Variable- change w/ the # of goods that are produced (wages, raw materials). Increases as production increases Total – add fixed cost & variable cost together Marginal- the additional cost of producing one more unit of output.

18. Revenue Total Revenue- total money coming in. Number of units sold multiplied by the price per unit. Marginal Revenue- Additional revenue from selling one more unit. Profit= Total Revenue-Total Cost Lolly’s Pops sells 1,000 lollipops a month at $2 a lollipop. Total revenue = 1,000 X $2 = $2,000 If they sold 1 more lollipop a month Lolly’s Pops total revenue would be $2,002. The marginal revenue would be $2. Marginal revenue is not always constant like this Items sold in bulk= marginal revenue drops