1. Economics Pre-assessment
Let’s see what you already know about Economics!

2. Taught by Professor Coleman
What is Economics?
Taught by Professor Coleman

3. In this chapter, we’ll discuss . . .
Scarcity and the Factors of Production
Opportunity Cost
Production Possibilities Curves

4. Scarcity and the Factors of Production
Bellringer
What comes to mind wheny you hear the word scarce?
Brainstorm a list of items that you think might be scarce.

5. Key Terms: Define Need Want Economics Goods Services Scarcity Shortage
Factors of production
Land
Labor
Capital
Physical capital
Human capital
Entrepreneur

6. Scarcity and Choice People can’t have everything they need and want
Economics—study of how people seek to satisfy both by making choices

7. Why must people make such choices?
The reason is . . .

8. Scarcity
Scarcity implies limited quantities of resources to meet unlimited wants.
Economics is about solving the scarcity problem
Not the same as shortage
Occurs when producers will not or cannot offer goods/services at the current prices

9. Can Time Be Considered a Resource? Is it scarce?
Create a chart that shows how, in a typical weekday, you allocate the 24 hours available to you.

10. Factors of Production

12. Which Scarce Resources were used to produce the fruits and vegetables below?

13. Section 1 Assessment
Record questions 1 through 6 on page 6 of your textbook.
Submit your responses upon entering class tomorrow.

14. Opportunity Cost
Bellringer
Choose 1.

15. Key Terms Matching Activity
Trade-off
Guns or butter
Opportunity cost
Thinking at the margin
The most desirable alternative given up as the result of a decision
An alternative that we sacrifice when we make a decision
Deciding whether to do or use one additional unit of some resource
A phrase that refers to the trade-offs that nations face when choosing whether to produce more or less military or consumer goods

16. Trade-Offs . . . Individuals and Trade-offs Businesses and Trade-offs
Society and Trade-offs

17. What are some trade-offs of buying a car?

18. Defining Opportunity Cost
The most desirable alternative given up as the result of a decision is called the opportunity cost.
Whatever you are willing to sacrifice
Using a Decision-Making Grid, Figure 1-2, pg. 10
What benefits will Karen forgo if she chooses to sleep later?

19. Thinking at the Margin
Deciding whether to do or use one additional unit of some resource OR
Deciding how much or how less to do

20. Thinking at the Margin Options Benefit Opportunity Cost
1st hour of extra study time
Grade of C on test
One hour of sleep
2nd hour of extra study time
Grade of B on test
2 hours of sleep
3rd hour of extra study time
Grade of B+ on test
3 hours of sleep
Thinking at the Margin
At what point is this person paying an added cost with little extra benefit?

21. Section 2 Assessment Record and answer questions 1-4 on page 11
Submit your responses upon entry tomorrow

22. Production Possibilities Curves
Bellringer
Define Key Terms
Explain why graphs sometimes show information more clearly than text or tables.
Production possibilities curve
Production possibilities frontier
Efficiency
Underutilization
Cost
Law of increasing costs

23. Production Possibilities
Shows alternative ways to use an economy’s productive resources
Textbook pages 14-15
What is the opportunity cost of the decision in Graph A?
What is the opportunity cost of choosing to produce the combination of goods shown at point c instead of that shown at point d?

24. Efficiency . . .
Efficiency—using resources to maximize production or output of goods and services
Represented by drawing a point inside the production possibilities frontier
Underutilization—using fewer resources than the economy is capable of using
Represented by any point inside the line (possibilities curve)

25. Growth . . .
When an economy grows, the entire production possibilities curve “shifts to the right”
Immigrants pour in Working
New inventions
When production capacity decreases, the curve “shifts to the left”
Country loses land in a war
Population ages, becomes less healthy or less educated (human capital decreases)

26. and Cost.
The alternative we give up when we choose one option over the other
View “The Law of Increasing Costs Explained” on YouTube
See Figure 1.7, page 17. What is the cost of increasing watermelon production?

27. Section 3 Assessment
Record and Answer questions 1 through 3 on page 18.
Submit upon entry tomorrow.

28. Chapter 1 Exam Visit: PHSchool.com Enter Web Code: mna-1011
Take Chapter 1 Self-Test
Raise your hand upon completion so I may record your grade.