1. Intro to Economics

2. Intro to Economics

3. Economics
Economics- study of how we make decisions with limited resources
Scarcity- not enough resources to produce all the things we want
Three basic economic questions:
What to produce?
How to produce?
For whom to produce?

5. Scarcity Scarcity forces us to make decisions
Trade Off- what you did not choose when making a decision
Opportunity Cost- value of what you did not choose when making a decision
Ex. You blew your paycheck on video games so now you can’t afford concert tickets
Trade Off? Opportunity Cost?
Trade Off- concert
Opportunity Cost- fun with friends, hearing your favorite band

7. Natural Resources- raw materials supplied by nature used in production
Factors of Production
5 Factors of Production
Natural Resources- raw materials supplied by nature used in production
Ex. Wood, iron, oil
Labor- physical and mental capabilities of humans
Ex. Workers

8. Factors of Production
3. Capital- money and tools used to produce goods and services
Ex. Machines, buildings
4. Entrepreneurship- person who starts the business
Ex. Bill Gates
5.Technology- new information to increase productivity
Ex. Computers control making things instead of making by hand

9. Productivity and Efficiency
Division of Labor- breaking down of one large job into many smaller jobs
Each worker becomes an expert in one isolated area of production
Ex. Assembly lines, making a car with an assembly line instead of one person making the car themselves
Increases Productivity and efficiency
Efficiency= as quick and cheap as possible

10. Division of Labor

11. Productivity and Efficiency
Specialization- people concentrate on goods or services that they produce better than anyone else

12. Markets
Market- free and willing exchange of goods and services between buyers and sellers (anywhere)
Ex. mall, grocery store, internet, etc.

13. Circular Flow Model
Circular Flow- money along with goods and services freely flow between each other
Resources leave a business and go to a consumer, then leave a consumer and go to a business
Ex. Getting paid by a business then spending the money with another business

15. Lorax Video No talking No cell phones
Answer your questions as you watch

16. Remainder of Class
Begin working on your project or completing make up work for this class