1. Intro to Economics Resources and Scarcity 3 questions of economics Opportunity Cost

2. » What are some reasons for studying economics? ˃Impact everyday life ˃helps people learn to manage resources ˃Explains the roles of producers and consumers. » Producers » Consumers » Supply » Demand » Scarcity ˃best described when a person is buying a used car due to limited income. ˃Or buying a limited steel phone due to its materials its made from.

3. » Economics is the study of producing and consuming goods and services. » Producers make products » Consumers spend money on products. (Provide the necessary capital) » Economist spends time studying interactions between producers and consumers. » William Poole believed economics should be taught in schools to students can learn how to make a good decision within an economy.

4. Economics a person can make better choices by understanding the benefits and consequences of a decision. » What could you gain? » What could you lose? » Is it worth it?

6. What is the one thing you would like to learn about? » Career? » New technology? » New movie? » Ancient History?

7. » “If I offer to give you something for nothing, is there a cost?” » Economic questions deal with making a decision about a product. » We answer these questions by: ˃Using factors of production ˃Meeting needs and wants Key words to know: » Limited » Factors of production » Needs vs. Wants

8. » Which of the following could be considered both a renewable resource and a nonrenewable resource? » Which resource is both renewable and inexpensive? » Iron ore » Sea water » Solar energy » Wheat crop » Lumber » Gold » Minerals

9. » Scarce resources - The basic economic problem that arises because people have unlimited wants but resources are limited. Because of scarcity, various economic decisions must be made to allocate resources efficiently. » Expensive resources- not scarce but still expensive to produce.

10. » Renewable resources- A substance of economic value that can be replaced or replenished in the same amount or less time as it takes to draw the supply down. » Some renewable resources have essentially an endless supply, such as solar energy, wind energy and geothermal pressure, while other resources are considered renewable even though some time or effort must go into their renewal, such as wood, oxygen, leather and fish. Nonrenewable resources- A resource of economic value that cannot be readily replaced by natural means on a level equal to its consumption. » Most fossil fuels, such as oil, natural gas and coal are considered nonrenewable resources in that their use is not sustainable because their formation takes billions of years.

12. 3 economic questions » WHAT should be produced? » WHO should receive it? » HOW should good and services be created? » When you’re a business the math equation you should be constantly analyzing is “Profit = Revenue – Production Cost”

13. » The three economic questions deal with how a producer deals with the “Factors of production” ˃Resources needed to provide goods or services. ˃Failure to answer the three questions will result in negative consequences. ˃Biggest question “Who has the greatest need?” ˃guaranteeing the fulfillment of needs and wants Capital » Resources used to make a product like materials, labor, land, etc. Land » Area which business uses to create the product. Piece of land or property owned by the business. Labor » Man hours used to create the product.

14. » If a new snack company spent months developing a new type of snack chip, but the chips are not selling, what could be the problem? » No research » Not meeting needs and wants of consumers » Didn’t view factors of production » Didn’t view which consumers have the greatest need or want

16. » Each person has to make a decision everyday. » Every decision we make affects the market in one way or another (deal with the consequences). ˃Kind of like a chain reaction ˃Butterfly effect ˃One decision affects

17. » Think of opportunity cost as cause and effect.. » For example: ˃Sara has to choose to go on vacation this summer or purchase a laptop for college. ˃Amir only has time to study or to play basketball. ˃Rico has to choose between a promotion, which requires more of your time to commit, or hanging with your friends.

18. » Opportunity Cost » For example: ˃Derek and Lily own a Flower shop. Wanting to expand into selling potted plants, they create a production possibility chart to asses whether the potted plants are a good idea. ˃How many potted plants can they make day 3? HINT: figure out the difference between day 1 and day 2.

19. » A curve depicting all maximum output possibilities for two or more goods given a set of inputs (resources, labor, etc.). » The Production Possibility Curve (PPC) assumes that all inputs are used efficiently. » Points A,B, and C are efficient but X and Y are not efficient. ˃Y = under efficient ˃X = over efficient Producer look at one equation: Revenue – Production Cost = Profit ($10,000-$3,000 = $7,000 profit)

20. Good Luck