1. AP Week 2
Objective: Be able to explain the 3 basic questions society must answer and what that has to do with opportunity costs. Be able to determine if a statement is normative or positive and explain why economist have different opinions on some things.
You will take notes and discuss with your shoulder partner and the class as a whole. You will use whiteboards to show your answers.
EQ: What are the 3 basic questions in economics? What is the difference between positive and normative? How do these influence economist?
Do Now: Annotate your notes from Friday. Summarize the concept of no free lunch.

2. Get a piece of string and tie it on a whiteboard
Get a marker and a calculator and put them in the bag along with a paper towel, folded.
Ponder for a moment on this, “Should college athletes be paid while they are playing for the university?” Have points to defend your answer.

3. Download the Krugman’s textbook
Download the Krugman’s textbook. I have it on my Iphone, on my home page.
Krugman’s AP Macro Economic book PDF file to download
David Anderson and Margaret Ray worked on the book and are very involved in the AP test.
%20Economics%20for%20AP%20Text%20Book.pdf
We will cover the 1st 8 units over Macro. You will not need the portion for Micro. Download the glossary and index.
You may also check out the, Principles of Economics by Mankiw from the bookroom.
You need access to one or the other at home.

4. By tomorrow read pages 1-35.
Make sure to take notes as you read to cover:
You will need to create vocabulary cards for the terms.
Put your name and period on the first card
Put the word on front and the definition on the lined back
Number each card, put them in order
Put a rubber band on them
Turn them in at the beginning of class on Next Wednesday.
We will test over them that morning

5. 3 basic economic questions: What to produce, how to produce it and who gets to consume.
Limited Resources to meet our unlimited wants and needs forces us to make choices. We say individuals make rational choices based on marginal benefits. Every choice has a cost, we just have to decide if the benefit is greater than the cost.
Marginal analysis is determining if the marginal benefit is greater than the marginal cost.
Marginal is doing one more- reading one more page, studying one more hour, eating one more cookie, hiring one more employee…

6. Economic systems
Economic systems are how each country decides how to use the resources. It coordinates choices about production, consumption and distribution of goods and services.
In a Market economy, supply and demand determine what to make, how to make it and who gets to have it. A market economy in its truest form would have no government (central agency) involvement. The decisions are made by people. People own the resources and have property rights.
In a command economy the resources are owned by the government/central agency and the decisions are made by them. There is no incentive to work harder, there are no property rights.

7. There are no absolute free markets and no absolute command.
The varies countries work somewhere on the spectrum between the two.
Gains/benefits of Capitalism or Free Enterprise: Variety of goods and services to meet the demands of people, better quality for best price due to competition and incentives.
Mixed economy
Command
Free Market
Free Enterprise
That is a very simplified explanation. In your studies you should have more depth on communism and socialism

8. Factors of production
Land- all natural resources (land, oil, timber. . .)
Labor- the effort of workers
Capital- ( in this context capital is) man made goods that are used to make goods and services (machines, buildings, tools)do not confuse this with capital as money used to invest--- we will see that capital later)
Human capital is the talents, skills, education that workers bring
Entrepreneurship- an entrepreneur uses the resources at a risk to make goods or services, they see a need or opportunity and make it happen.

9. In closing
Objective: Be able to explain the 3 basic questions society must answer and what that has to do with opportunity costs. Be able to determine if a statement is normative or positive and explain why economist have different opinions on some things.
You will take notes and discuss with your shoulder partner and the class as a whole. You will use whiteboards to show your answers.
EQ: What are the 3 basic questions in economics? What is the difference between positive and normative? How do these influence economist?

10. Tuesday
Before we start we need to finish the material from yesterday. The bulk of this material is covered in your readings. This will only hit the high points. You have to read pages 1-35.
Which of the following is an example of a resource?
I. petroleum
II. a factory
III. a cheeseburger dinner
I only
II only
III only
I and II only
I, II and III

11. Tuesday
Objective be able to explain what a business cycle is and be able to draw one. Be able to describe how employment and unemployment are measured and how they change over the business cycle. Be able to define aggregate output and explain how it changes over the business cycle. Define inflation and deflation.
You will be able to read, write and speak using economic terms on the business cycle.
EQ: What is economic growth? Where is it shown on the cycle and how does it determine the living standard.
Do Now: Go back over your notes from yesterday.

12. Opportunity cost
When an ad says buy one get one free- is it really free?
On you whiteboard write down all the things you could do tonight if you did not have homework.
Now write down the opportunity cost of not having homework.

13. Opportunity cost
The real cost of an item is its opportunity cost- what you had to give up in order to get it.
All the other things are trade-offs
Think about the opportunity cost of higher education-
How did you respond to the question earlier about college athletes?

14. Micro versus macro
Micro focuses on choices made by individuals, households or firms
Macro focuses on bigger picture the ups and downs of the economy
Economic aggregates are economic measures that summarize data across many markets- not just hot dogs or watermelon but all goods and services

15. Positive versus Normative
Positive is economic analysis that describe the way the economy actually works
Normative makes statements about how it should work
Economist often do agree on things, but when they don’t it is because they have different values that are impacting the judgement.
90% agree that tariffs and import quotas usually reduce general economic welfare and that rent ceilings cause a shortage and poorer quality.

16. 3 goals
Economic growth
Price stability
Low unemployment

17. I have the vocabulary and links to 2 you tube sites that are very helpful on my web page.
Jason Welker Business cycle
Hand out graph paper
Follow along with him

18. When do you think a recession begins?
Depression is a very deep and prolonged downturn
Recession periods of economic downturns when output and employment are falling.
Employment is the number of people are currently working for pay
Unemployment Is the number of people who are actively looking for work buy are not currently employed.
Unemployment rate The % of the LF that is unemployed.
Labor force (LF) is equal to the sum of employment and unemployment
Output is the quantity of goods and services produced
Aggregate output is the economy’s total production of goods and services for a given time period

19. Inflation and deflation www.usinflationcalculator.com
Inflation is the rising overall price level
Deflation is the falling of overall price levels
A change in the price of a few goods just changes to opportunity cost, it is not inflation or deflation.
Both inflation and deflation are problems, inflation discourages people from holding on to cash, because cash loses value
Deflation can cause people to hold onto the cash and not invest it, this can increase the problems of a recession
The goal of a government is to keep stable prices, with stable increases.

20. Economic growth- an increase in the maximum amount of goods and services an economy can produce. That does not mean the economy is.
It is essential for prosperity (think of what we produce now compared to say 1930’s
CONFLICT
Sometimes the government or Feds make decisions that impact unemployment knowing that it will cause inflation. They look at the overall picture and try to keep it balanced in the long run

21. Tuesday in closing
Objective be able to explain what a business cycle is and be able to draw one. Be able to describe how employment and unemployment are measured and how they change over the business cycle. Be able to define aggregate output and explain how it changes over the business cycle. Define inflation and deflation.
You will be able to read, write and speak using economic terms on the business cycle.
EQ: What is economic growth? Where is it shown on the cycle and how does it determine the living standard.
Exit- draw and label a business cycle

23. Facts and figures on Business Cycle
A depression is a very deep and prolonged downturn, we have not had one since
Recession are less prolonged economic downturns
National Bureau of Economic Research says we have had 11 recessions in US since WWII.
The average last 11 months
Average expansion lasted 58 months
Average length of a business cycle from beginning of a recession to beginning of the next recession is 5 years and 8 months. Shortest was 18 months and longest was 10 years and 8 months
Rule of thumb is that a recession is declared with 2 consecutive quarters with a drop in aggregate output. So 6 months.
The US has National Bureau of Economic Research (NBER) make the call- not everyone agrees to their call.

24. Wednesday
Objective: be able to explain the importance of tradeoffs, describe what the production possibilities curve model tells us about efficiency, opportunity cost and economic growth. Be able to construct a production possibility curve and analyze one.
You will be able to read the notes and graphs, be able to write and discuss.
EQ: What does the PPC tell us about efficiency, opp. Cost and economic growth?
Do Now: Go back over the notes from yesterday. Can you list the parts and label the parts of the Business cycle? What is the LF?

25. Make sure you have the employment terms highlighted and that you can figure unemployment, labor force etc. using the formulas.

26. Hand out the PPC
Complete the two handouts with your shoulder partner

27. Wednesday in closing- remember we will have a vocabulary test one week from today.
Objective: be able to explain the importance of tradeoffs, describe what the production possibilities curve model tells us about efficiency, opportunity cost and economic growth. Be able to construct a production possibility curve and analyze one.
You will be able to read the notes and graphs, be able to write and discuss.
EQ: What does the PPC tell us about efficiency, opp. Cost and economic growth?
Create a PPC as an exit

28. Thursday
Objective: BE ABLE TO APPLY DIFFERENT INFORMATION TO THE PPC, BE ABLE TO STATE THE FACTORS THAT WOULD SHIFT A PPC AND EXPLAIN WHY
Be able to look at graphs and determine what would happen to the graph when you have a situation given to you. Be able to draw the graph at different conditions.
Do Now: read back over your notes on business cycle, look at the US cycle and consider what it says from your notes.
EQ: What causes a PPC to shift, what doesn’t?

29. Milton Friedman Pencil video https://www. youtube. com/watch
Milton Friedman Pencil video Jason Walker video on Absolute and comparative advantage
Notes over comparative and absolute
With shoulder partner answer problems

30. Thursday in closing
Objective: be able to explain how trade leads to gains for an individual and the economy. Explain the difference between absolute advantage and comparative advantage.
You will write and use math to calculate the trade differences. You will listen to Fredman on a pencil
EQ: What is the difference between absolute and comparative? Why is trade good?
Do Now: Answer the question I handed you as you came in on PPC

31. Friday:
Objective be able to practice with PPC explain scarcity as well as marginal analyzes
Be able to listen to video clips from movies and identify scarcity, PPC, factors of production and other terms then apply them
EQ: What happens if productivity drops?
Do Now: look back over your notes- I will grade your notebook next Thursday, make sure you have C-notes in your notebook- highlights, circles, questions, summary, chunking, starring, etc. Do you have dates for everyone? Do you have the EQ for each day?

32. https://www. youtube. com/watch
monster inc., PPC