1. Unit One Thinking Like an Economist

2. Fundamental Economic Concepts

3. Chapter One What is Economics?
The Study of how people try to satisfy what appears to be seemingly unlimited and competing wants through the careful use of relatively scarce resources.

4. Do you think the study of economics is worth your time and effort?

5. Go to page 3, examine the picture – How does this image symbolize the chapter titled What is Economics?
Imagine you have $100 to spend – make a list of items that you would like to buy and the approximate price of each. Add up the total – did you go over a $100? If so you will need to remove something from your list
Choice is the Key concept in Economics!

6. Scarcity and the Science of Economics Lesson 1
Go to page 6 and Complete the Scarcity activity.

7. What is the most fundamental economic problem facing all societies?
SCARCITY
The condition that results from society not having enough resources to produce all the things people would like to have.

8. Do you know the difference between a need and a want?
Need – is a basic requirement for survival – food, clothing, shelter
Want – is a way of expressing a need – example – for food a person may “want” pizza

9. Economic Products – goods and services that are useful, relatively scarce, and transferable to others.
Good – an item that is economically useful or satisfies an economic want
-Durable and Nondurable goods
Project information

10. Make a Collage Regular Economics only !!!!!!!
Divide your paper in half
Label one side “Durable Goods” and the other
side “Nondurable Goods.”
Collect 6 pictures to use as example for each side
Graded on :
Following Directions: 5 points
Durable Goods: 15 points
Nondurable Goods: 15 points
Neatness/Name/Title: 5 points
Turned it on Time: 10 points
Total: 50 points

11. Read the Article on pg 9 – Adam Smith
Be prepared to discuss it.

12. Adam Smith pg. 9 Adam Smith is considered the _______________.
Regular Economics only
Adam Smith pg. 9
Adam Smith is considered the _______________.
What is the name of his book and in what year was it written?
Smith believed that political economics depends on a __________________.
What did Smith mean by “Invisible Hand”?

13. Important Economic Terms
Consumer Good – use by individuals
Capital Goods – used to produce other goods
Services – work that is performed
Consumers – one who uses goods and services

14. Value – refers to a worth that can be expressed in dollars and cents
Paradox of Value - what makes something valuable?
Utility – the capacity to be useful and provide satisfaction
Wealth – accumulation of products

15. What is TINSTAAFL?
THERE IS NO SUCH THING AS A FREE LUNCH

16. Three Basic Questions
What to produce?
How to Produce?
For Whom to Produce?

17. The Scope of Economics Description - Gross Domestic Product (GDP)
Analysis
Explanation
Prediction

18. Copy and answer the following questions:
What is the basic economic problem facing all societies?
How is need different from want?
What do the letters TINSTAAFL stand for, and what does the term mean to consumers?
What are the three basic questions societies have to answer about the way their resources are used?
What are the four key elements of the study of economics? Explain briefly why each one is important.
What is scarcity in an economic sense?
What is the difference between a consumer good and a capital good?

19. 8.What kind of economic product is a service?
9.What is a consumer?
10.To what does value refer?
11. What is the paradox of value?
12.What is required for something to have value?
13.What is wealth?, List the four characteristics of the accumulated goods that make up economic wealth.
14. Define GDP

20. Our Economic Choices Sec. 2

21. Think of the economy as two broad groups: Producers and Consumers
Complete activity on page 14

22. Factors of Production Land – natural resources
Capital – tools, equipment, machinery and factories used in production (Capital Goods) (Financial Capital)
Labor - workers
Entrepreneurs – risk takers
Equals – Production – the process of producing goods and services

23. Production Possibilities Curve
Identifying Possible Alternatives
Fully Employed Resources
Opportunity Cost – the value of the next best alternative given up
The Cost of Idle Resources
Economic Growth

27. There are alternatives and costs to everything we do
There are alternatives and costs to everything we do. In a world where “TINSTAAFL”, it pays to examine these concepts closely.
TRADE –OFFS or alternative choice – figure discuss
OPPORTUNITY COST – the cost of the next best alternative use of the money, time, or resources when one choice is made rather than another

29. Opportunity Cost:
 Gerard has two choices for a summer job. The first is at a computer manufacturer, where he would earn $10.25 per hour. The second opportunity is with a landscaping company, where he could work and have lunch with three of his closest friends every day. The landscaping job would pay $8.65 per hour. For one 40-hour workweek, what would be the opportunity cost, in dollars, of accepting the landscaping job? What would be the opportunity cost of accepting the job with the computer manufacturer?

30. Consumer Rights The right to safety The right to be informed
The right to choose
The right to be heard
The right to redress
Consumerism - a social movement that aimed at promoting the interests of consumers

31. Consumer Responsibility
Include important details and copies of receipt, guarantees, and contracts to support your case
Report the problem immediately. Do not try to fix a product yourself, because doing so may cancel the warranty
If you need to contact the manufacturer in writing, type the letter or send an . Keep a copy

32. Keep cool. The person who will help you solve your problem is probably not responsible for causing the problem
Keep an accurate record of your efforts to get the problem solved. Include the names of people you have spoken to or written to and the dates on which you communicate
Consumers are expected to do his or her research before purchasing a product
Behave ethically when dealing with the producer or the merchant

33. Complete sec. 2 handout

34. Using Economic Models sec. 3
Because resources are scarce, consumers need to make wise choices.

35. Economic Growth
When a nation’s total output of goods and services increase over time
Economics growth requires risks and sacrifices.
Economist can describe economic growth in a number of ways but the Production Possibility Curve is the easiest
Everyone benefits when resources are used efficiently (Increased Productivity)
Human Capital is one of the major contributions to growth
Human Capital – the sum of the skills, abilities, health, and motivation of people pg. 23 discuss*

36. Economic Growth – occurs when a nation’s total output of goods and services increases over time
The most important factor to Economic Growth is Productivity
Productivity – measure of the amount of output produced by a given amount of inputs in a specific period of time
Division of Labor – workers are arranged so that individual workers do fewer task
Specialization – when a worker does one task and does it well
Human Capital – the sum of the skills, abilities, health, and motivation of people

37. The Circular Flow of Economic Activity
Factor Market – the market where productive resources are bought and sold
Product Markets – market where producers sell their goods and services to consumers
Draw the chart on page 25 and answer the questions under the chart - turn in for a grade

38. Economic Interdependence
We rely on others, and others rely on us to provide the goods and services that we consume

39. Thinking Like an Economist
Build Simple Models
Employ Cost-Benefit Analysis –compare the cost of an action to the benefits received
Take Small, Incremental Steps

40. The Road Ahead
Understanding the FREE ENTERPRISE ECONOMY- one in which consumers and privately owned business, rather than the government, make the majority of the WHAT, HOW, & FOR WHOM decisions
STANDARD OF LIVING – the quality of life based on the possession of necessities and luxuries that make life easier
Economics for Citizenship
Making the Rational Choice

41. Chapter 1, sec. 3, pg. 29
Answer questions 3 – 6

44. Chapter 1 & 2 test Jan. 13th
What you need to have with you:
Key Terms – all of the chapter
Lesson 1 Questions 1 – 14
Lesson 2 handout – complete
Lesson 3 Questions pg. 29, # 3 - 6