Warm up – 8.2.16 Please write down the questions below. From our discussion yesterday, please answer the questions as best as you can. We will turn in.

Warm up – Please write down the questions below. From our discussion yesterday, please answer the questions as best as you can. We will turn in all warm up activities on Friday. What are the three resources everyone needs to survive? What are five “wants” that you would like to purchase in the next year? What is “scarcity”? (4 words) What are two resources that are scarce?

Scarcity …

Standard for the day: Define and give examples of the productive resources (factors of production) (for example, land, labor, capital, and entrepreneurship)

Essential Question for the day
Describe the three factors of production.

Upcoming Assessments Upcoming quiz will be on Thursday, August 11, It will cover standards Economic Fundamentals 1 and 2. Please put this date on your calendar. Thanks.

Define 4 factors of production
Land Labor Capital Entrepreneurship

Identify which factor of production is underlined
Warm up – Please number your warm up 1 – 13; Read the paragraph and for each section underlined; Identify which factor of production is underlined

Standard for the day: List a variety of strategies for allocating scarce resources …

How are scarce resources allocated?

Allocating Scarce Resources
Supply and Demand (Prices/Auction): Allows rationing of a resource based on who can afford the price set by the market. The more desirable and the higher the price. This method is efficient because one can easily tell whether or not the resource can be allocated based on their willingness and ability to pay the price.

Authority: This allocation strategy allows for quick action because a person or a group of people in power can make and implement the decision quickly. In countries where the government makes and carries out decisions by force, economic changes can happen quickly because the government decides how to distribute resources and enforces the decision through military/police power.

Random Selection (Lottery): This allocation strategy can be handled quickly and gives everyone who wants the resource equal odds of receiving it. This strategy can be inefficient because it may allocate the resource to a purpose or person who does not need it or know how to produce using it. If the government randomly selects individuals to receive farmland, the land may go to someone who has no knowledge of farming techniques and the resource may be underutilized.

First Come, First Served: This allocation strategy allows people to receive a resource if they are the first one in line for it. Many concert and sporting events use this method in addition to price. Rather than set all prices extremely high because there are people willing to pay it, many events offer lower price tickets so that all fans will have a chance of purchasing an affordable ticket. This can be an inefficient strategy because fans will spend time they could have used at work or school to camp out at the ticket window or endlessly refresh their online browser as the ticket outlet’s servers are overwhelmed.

Personal Characteristic: This allocation strategy allows resources to be distributed based on need or merit. Ideally, the person who gets the scholarship or the job is the one best qualified for it. However, personal characteristics can also be used negatively such as when one does not get a job due to discrimination against a personal characteristic of the individual.

Contest: This allocation strategy can distribute the resource to the person who wins. The “winning” could be based on running a race (who is fastest), in academics (valedictorian has the highest GPA), or in a test of knowledge/skill (Jeopardy contestant or chess champion). This strategy can be inefficient on a day to day basis. You don’t want to run a race to see who gets the last slice of pizza in the cafeteria. It would take too long.

Please follow directions in the box below for letter “B”
Warm up – Please follow directions in the box below for letter “B”

Standard for the day: List a variety of strategies for allocating scarce resources …

How are scarce resources allocated?

https://wikispaces.com/join/9RT7R9H
Please type the following into the address bar: Username should be: “Last Name. First Name” For example: “Washington.George”

Copy and paste with your answers the “Icebreaker activity” on the front page (if you are a private person, to :

Please copy down the five questions. Thanks!
Warm up – Please copy down the five questions. Thanks! 1) What is the business concept that was presented? 2) How much are the entrepreneurs asking for from the Sharks (Dollar amount and Percentage) 3) What deals are being offered by the investors? Any counter-offers? If so, what are they? 4) Do the entrepreneurs get a deal? If so, from whom? 5) Would you have invested? Why or why not?

Standard for the day: Define opportunity cost as the next best alternative given up when individuals, businesses, and governments confront scarcity by making choices.

Why must the opportunity cost of a decision always be something desirable?

Please copy down the four questions. Thanks!
Warm up – (Monday) Please copy down the four questions. Thanks! What is the name of the first graph we will learn about in this class? What are three things that a PPC can show? What is the opportunity cost from moving from Point C to Point A? What does a bowed out PPC show?

Standard for the day: Illustrate by means of a production possibilities curve the trade-offs between two options.

How do economists use the phrase “guns or butter”?

Warm up – 8.9.16 Point A to Point B Point B to Point C
Please copy down 1 – 5, use the PPF on the next slide to find the opportunity cost for the questions below. Point A to Point B Point B to Point C Point C to Point D Point D to Point E Point A to Point E

Standard for the day: Explain that rational decision occurs when the marginal benefits of an action equal or exceed the marginal cost

What does it mean to think at the margin?

RATIONAL DECISION MAKING

Rational Decision Making
Analyzing costs and benefits before making a decision MARGINAL thinking is key What is the cost/benefit of my NEXT decision Past decisions don’t matter this affects PRODUCERS AND CONSUMERS A rational decision is made when the marginal benefit is equal to or greater than the marginal cost

Costs and Benefits For producers, this is simply measured in dollars
Marginal costs of the inputs vs. marginal revenue For consumers, it is trickier We measure benefits in terms of UTILITY How “useful” is the item or service We use “utils” as the measure for this

Another example A person opens a business making sandwiches. He’s purchased a store and all of the food products, now he wants to hire some people. He decides to hire two people to start with and pay them $50 a day. His costs/benefits sheet for a month looks like this:

Rent/Food/Entrepreneurship = $750
1 Month Rent/Food/Entrepreneurship = $750 Worker # Cost Production Price/Sand 1 $750 250 sandwiches 5 2 Total Costs: =2250 Total Output: 500 x 5 = 2500

Should he hire worker #3? Why?
1 Month Rent, Food, Entrepreneurship - $750 Worker # Cost Production Price/Sand 1 $750 250 5 2 3 200 4 100 Should he hire worker #3? Why? What about #4? Why?

Warm up – ( Wednesday) Please copy down 1 - 3, use the PPF on the next slide to find the opportunity cost for the questions below. What is the opportunityy cost of making 7 book shelves with the time and wood available? What must happening order to move from point B to point C? Point E represents an impossible situation. Why?

Standard for the day: Explain that rational decision occurs when the marginal benefits of an action equal or exceed the marginal cost

What does it mean to think at the margin?

Warm up – 8.2.16 Please write down the questions below. From our discussion yesterday, please answer the questions as best as you can. We will turn in.

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Warm up – 8.2.16 Please write down the questions below. From our discussion yesterday, please answer the questions as best as you can. We will turn in.

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Presentation on theme: "Warm up – 8.2.16 Please write down the questions below. From our discussion yesterday, please answer the questions as best as you can. We will turn in."— Presentation transcript:

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