1. ECONOMIC CHOICES AND DECISION MAKING

2. ECONOMICS AGENDA: TUESDAY JANUARY 31, 2017
Learning Objective: Understand the decision making grid and opportunity cost
Standard: 12.1 Students understand common economic terms and concepts and economic reasoning.
Warm up question
The decision making grid and opportunity
Practice activities
Closure question
ECONOMICS TEST:
FRIDAY FEBRUARY 3
UNIT 1

3. WARM UP: JANUARY 31, 2017
Give three reasons why it can be difficult to make decisions about what to buy at a clothing store.

4. Trades-Offs These are alternative choices to make an economic decision
A decision making grid is how to analyze an economic problem
Forces you to consider relevant alternatives
Requires you to evaluate each alternative based on the criteria you selected

5. Opportunity Cost
Economists see costs as more than a price tag placed on a good or service
This is the cost of the next best alternative use of money, time or resources
Time has an opportunity cost
Part of making economic decisions involves recognizing and evaluating the cost of the alternatives as well as making choices from among the alternatives

8. My Decision Making Grid (p.20 example)
Cost less than $100
Durable?
Will parents approve?
Future expense necessary?
Can use any time? 1. 2. 3. 4. 5.

9. Opportunity Costs
CHOICE ONE WITH $100
CHOICE TWO WITH $100

10. Closure Question
What have you learned today about trade-offs and opportunity cost?

11. WARM UP QUESTION: WEDNESDAY FEBRUARY 1, 2017
Peter has two choices for a summer job. Choice one is at a computer manufacturer. He would earn $15 per hour. Choice two is with a landscaping company where he could work and have lunch with his three best friend. This job would pay $10 per hour. What would be the opportunity cost of accepting the job with the computer manufacturer? What choice would you make if you were Peter?

12. NEWSPAPER ARTICLE QUESTIONS
Read the newspaper article carefully.
Explain in a paragraph what the article is about.
Does the article relate to making economic choices? Provide examples.
What did you learn about the economy from reading this article?

13. Closure Question
How did reading the newspaper article give your a better understanding of the economy?

14. WARM UP QUESTION: WEDNESDAY FEBRUARY 2, 2017
During World War II, the American economy temporarily produced beyond it production possibilities frontier. How do you think it was possible for this to happen?

15. Building Economic Models
Economists study how people satisfy unlimited and competing wants with the use of scarce resources
They are concerned with strategies that will help us make the best choices
A model is a simplified theory or picture of what something is like or how it works
Models reduce complex situations to their most basic elements

16. The Circular Flow Diagram

17. Production Possibilities Frontier
This illustrates trade-offs
and opportunity costs

18. Models are based on assumptions Models can be revised
Economic Models
Models are based on assumptions
Models can be revised
Used to understand the past, present or future
Model can be corrected if need be

19. Cost-benefit analysis
This compares the costs of an action to the benefits received
Businesses make investment decisions by investing in which give the highest return per dollar spent
If you like both A and B, but B costs less, it would be better to choose B because you get more satisfaction per dollar spent

20. Answer questions 1-7 on page 25
Classwork/Homework
Answer questions 1-7 on page 25