1. Unit 1: Chapter 1- Economic Concepts What is Economics
Unit 1: Chapter 1- Economic Concepts What is Economics? -Scarcity -Factors of Production -

2. Essential Questions- Do now!
Take a Textbook- write the number on the book list
Take out your notebooks/ Paper
Are you satisfied with the possessions you have in life? If not, why? If yes, why?
Identify 5 wants you have right now.
List two ways how scarcity has impacted your life: socially, and finically.

3. Objectives Understand why scarcity affects everyone.
List the three economic questions that societies face because of scarcity.
Describe the four factors of production and their uses.

4. KEY CONCEPTS Needs — things necessary for survival
Wants — desires that can be met by consuming products
Needs — things necessary for survival
Scarcity — lack of resources available to meet all human wants
not a temporary shortage
Economics — study of how people use resources to satisfy wants
examines how individuals and societies choose to use resources
organizes, analyzes, interprets data about economic behaviors
develops theories, economic laws to explain economy, predict future

5. How does scarcity effect us? In a group of three
Consumers
Producers
Government

6. What I want and what I need
Want: a way of expressing a need.
“I want to eat lunch at Chipotle.”
Jordan’s
Clothing from Hollister
Iphone and ipad
Mercedes Benz
5 bedroom house for 2.
Need: Basic requirement needed for survival.
“I need to eat, so I can concentrate in school.”
Food
Water
Shelter
Clothing
shoes

7. 3 Basic Economic Questions
In a group of 3 read one of the following section on pages 6-7 and summarize it for your partners
What to Produce?
How to Produce?
For Whom to Produce?
Why do we need to consider these questions?

8. Factors of Production Land
“gifts of nature” / natural resources not man made
Fields, deserts, livestock, sunshine and climate
What social factors may affect the availability of land?
Labor
People with efforts, abilities, and skills
Non-entrepreneurs
What social factors may affect the availability of labor?
Capital
Tools, equipment, machinery, factories.
Items used to produce goods or services
Financial capital: What is it?
What social factors may affect the availability of capital?
Q: How are these three factors interconnected?

9. Entrepreneurship
Entrepreneurship — vision, skill, ingenuity, willingness to take risks
Entrepreneurs anticipate consumer wants, satisfy these in new ways
develop new products, methods of production, marketing or distributing
risk time, energy, creativity, money to make a profit

10. Review of Section 1: What is Economics?
1. Which response best explains why the study of economics is important?
Describes our standard of living
Become better decision makers
Increase our consumption of consumer goods
Determine what goods out to be produced
2. Which response best explains the money used to buy the tools and equipment needed for production?
Capital goods
Financial capital
The factors of production
Wealth 3.

11. Which response does not explain the factors of production?
entrepreneurship
money
Labor
capital

12. Economic Concepts
GDP: the dollar value of all final goods and services and structures produced within a countries borders in a 12-month period.

13. Peer Activity: Follow Up
Look through advertisement ads
Find wants and need and post them.
Try to find at least 1 form of Land, labor, and capital through pictures or words
Post on construction paper.

14. Economics Choices: Opportunity Cost, You’ve Economized!
VS.
How do incentives and utility influence your decision making?
Making Choices involves…
Motivation for Choices
TINSTAAFL
Decision –Making Process
How do trade-offs and opportunity cost influence your cost-benefit analysis?
Application: You have enough money to buy either an iPod touch player that is on sale or some school supplies you want. What incentives and utility would guide your decision?

15. Marginal Cost and Marginal Benefits
Cost: additional cost of using 1 more unit of a product
Benefits: additional satisfaction from using 1 more of a product
Turn to page 16
Complete a decision making grid in your group under application C.

16. Analyzing Decision Making Grid
Turn to page 15 in your textbook
Follow along as we review the grid
Follow up questions:
What is Max’s opportunity cost of three hours of study?
What is Max’s marginal cost moving from a grade of B+ to a grade of A-?
2 pts EC **What prediction would analyzing the marginal cost and marginal benefits illustrate?

17. Production Possibilities Curve PPC
Illustrates the impact of scarcity on an economy by showing the max number of goods and services that can be produced using limited resources. (Based on assumption)
Assumptions
Resources are fixed
All resources are fully employed
Only two things can be produced
Technology is fixed
PPF?

18. What do PPCs teach us? Our efficiency as a nation Underutilization
Law of increasing opportunity cost
Shifts in PPC

19. Branches of the Economic
Macroeconomics
Microeconomics
Whole economy
Economic growth, stability, and international trade
Interest: money, banking, finance, government taxation and spending polices, unemployment and employment
inflation
Individual economy
Consumer markets, business markets, and labor markets
Markets, prices, costs, profits, competition, government regulation, consumer behavior, business behavior

20. Houston we have a problem!
Task
Shortage of Money
Scarcity of Items
Popcorn
Pop tarts
Warheads
Alternatives Choices
What will it cost?
i.e. buying a $10,000 used car, going to a movie with friends next Thursday night
Form groups of 2 or 3
5 minutes to discuss ways to distribute the popcorn (remember our constitution)
list all possible ways as a class (No discussion)
Lets Group categories
Advantages and Disadvantages
1 vote each to determine who gets the popcorn

21. Why is it important for economist to use to positive and normative economics? illustrations
Read Section 4
Create the table below and complete this section with a partner and be ready to discuss.
Concepts
Similarities
Differences
Charts and Tables vs. Graphs
Micro vs. Macro
Positive vs. Normative

22. Adam Smith Reading
What division of labor trends are found in smaller factories?
What is the division of labor needed?
What problems do you believe may happen with the division of labor visible in a large factory?
What was Adam Smith’s purpose of this article?