1. Chapter 1 What is Economics?
S1: Scarcity and Factors of Production
S2: Opportunity Cost
S3: Production Possibilities Curves

2. Bell Work: S1 (10 minutes) Get book, folder, and texts
Pick up Chapter 1 and Unit Worksheets
3 hole punch them and place in Folders
Answer A – E on Unit 1 Essay Warm-up
Pgs

3. Section 1: Scarcity and Factors of Production
Chapter 1 Essential Question
Need to be able to answer this!!
“How can we make the best economic choices?” Write at top of S.1 notes
Objectives to learn
Why scarcity and choice are the basis of economics
What entrepreneurs do
3 factors of production and differences bt human/physical economics
How scarcity affects the factors of production

4. Key Terms Turn to page 2 Slideshow on Web

5. Why are scarcity/choice basis of economics?
How does Scarcity force people to make economic choices?
Makes everyone make choices by making us decide which options are most important to us
Scarcity states there are limited goods/services for unlimited wants.
People need to make choices in order to satisfy m/i wants
People satisfy their needs/wants w/ goods/services
People’s needs/wants are unlimited, goods/services are not

6. Why are scarcity/choice basis of economics?
Economics begins w/idea that people cannot have everything they want/need
The fact that limited amounts of goods and services are available to meet unlimited wants is called scarcity.
Scarcity forces people to make choices but it is not the same as a shortage.
Shortages are temporary while scarcity always exists.

7. What do entrepreneurs do?
Entrepreneurs play a key role in turning scarce resources into goods/services
Willing to take risks in order to make a profit
They:….
Develop original ideas
Start businesses
Create new industries
Fuel economic growth
1st Task is to assemble factors of production
Land
Labor
Capital

8. Factors of Production: Land
Refers to all natural resources used to produce goods/services
Resources include:
Fertile land for farming
Oil
Coal
Iron
Water
Forests

9. Factors of Production: labor
Labor is the effort people devote to tasks for $$
Labor includes:
Medical care provided by a doctor
Instruction provided by a teacher
Tightening of a bolt by an assembly-line worker
Creation of painting by an artist
Repair of television by technician

10. Factors of Production: capital
Refers to any human-made resource that is used to produce other goods/services
Economy requires both human/physical capital
Physical
Buildings
Equipment
Tools
Human
College education
Training
Job experience

11. Benefits of capital
Key factor for production b/c people and companies can use it to save time/money
Benefits of capital
Increased efficiency
Increased knowledge
Better time-management
Increased productivity

12. Checkpoint: Why are goods/services scarce?
Scarce Resources
Checkpoint: Why are goods/services scarce?
Goods/services are scarce b/c the resources used to produce them are scarce
Only so many natural resources available to produce goods
Labor for production can be limited
Physical capital can be limited for many industries
Each resource may have alternative uses
People, businesses, govt.s must choose which alternative they want most

13. Lesson closing Entrepreneur simulation on Pearson
Class Demonstration
Go back and answer the Chapter Essential Question
“How can we make the best economic choices?”
Found on page 4 of Chapter Warm-up
A-D
Homework
Read Section 2: pgs. 8-12

14. Section 2: Bell Work Get books, folders 2 Choices;
Grab scratch paper and copy “bubble” chart on pg. 8
Put “bubble” chart at top of S.2 notes
Answer
Questions to captions on pg. 5 and 9
Think, pair, share

15. S.2: Opportunity Cost
Guiding Question
How does opportunity cost affect decision making? Write at top of S.2 Notes
Objectives to learn
Why every decision involves trade-offs
The concept of opportunity cost
How people make decisions by the margin
Key Terms

16. How does opportunity cost affect decision making?
Every time we choose to do one thing, we are giving up the opportunity to do another
When we make decisions about how to spend our scarce resources, like money/time, we give up our chance on something else
All indiv’s, businesses, and large groups make decisions that involve trade-offs
Trade-offs involve things easily/not easily measured
Money, property, time, and things not easily (enjoyment or job satisfaction)

17. How does opportunity cost affect decision making?
Businesses and Govt. trade-offs
Businesses make trade-offs when they decide how to use their factors of production
Famer uses land to plant corn, cannot use same land to plant soybeans
Govt’s make trade-offs when they decide to spend money on military needs instead of domestic, or vice-versa
Checkpoint: What are trade-offs?
Answer economics and you from BW

18. What is opportunity cost?
Most trade-offs have one of the “rejected” alternatives being more “desirable” than rest
That most desirable alternative given up by the decision is the opportunity cost

19. How do people make decisions
Decision making grid
Can help you decide if you are willing to accept the opportunity cost of a choice
Read thru pg. 10
Answer 2 ?s
the Margin
When you decide how much/less to do you are thinking on the margin
Involves comparing opportunity costs/benefits
Called cost/benefit analysis

20. Thinking at the Margin Marginal Costs and Benefits
To make good decisions you must weigh the marginal costs against marginal benefits
M.Cost = extra cost of adding one unit such as sleeping or getting one more cookie
M. Benefit = extra benefit from adding one unit such as sleeping or getting one more cookie
Once the marginal costs outweigh the marginal benefit, no more units can (or will) be added
Example: 1 more cookie is o.k. b/c it is only 35 more calories but once the unit cost (calories) exceeds what the benefit (satisfaction) is you will not add anymore.
Best example is how often you tell yourself you can “sleep just ____ much longer” before there is a cost you aren’t willing to put up with

21. Cost/benefit analysis
Read and answer figure 1.1 on making decisions at the margin
Answer the 2 ?s
Decision making at the margin
Like opportunity cost, thinking at the margin applies to businesses/governments as well
Employers margin when they decide how many workers to hire
Legislators margin when they decide how much to increase govt. spending on a project

22. Lesson Closing Trade-off worksheet Complete pg. 5: Chapter Essential ?
Complete and have ready for tomorrow
Complete pg. 5: Chapter Essential ?
“Scarcity, choices, and you!”
Video to watch while working
Nature of Economics

23. Section 3 Bell Work Finish up Trade-off worksheet
Have Worksheet ready to go over
Start Nature of Economics: 1st 12:00

24. S3: Production possibilities curves
Guiding Question
“How does a nation decide what/how much to produce?” Write at top of S3 notes
Learning Objectives
Interpret a PPC
Explain how PPC’s show efficiency, growth, and cost
Why a country’s production possibilities depend on its resources and technology
Key Terms

25. How does a nation decide what/how much to produce? PPC Curves!!
To help decisions, economists use PPCs as a tool
Curve helps nation’s economists determine alternative ways of using a nation’s resources
Production Possibilities
Economists use graphs to analyze choices/trade-offs that people make
To draw PPC, begin by deciding which goods/services to examine.
Refer to graph, pg. 14
Production Possibilities Frontier
Line that shows the maximum possible output an economy can produce
Each point reflects a trade-off
Happens b/c factors of production are scarce
L, L, and C to make one product means fewer of those to make the other

26. What do PPCs show? Efficiency Growth
PPF represents an economy working at its most efficient level
Economies can work inefficiently, using fewer resources than capable.
Underutilization
Growth
When an economy grows the curve shifts to right
Production capacity can also decrease, leading to shift left
Cost: Can help show the opportunity costs of Decisions
Cost increases as production shifts from making one item to another
Law of Increasing Costs: Refer to Chart pg. 17
Explains as we move along the curve, we trade off more & more for less & less output

27. Technology and Education
Technology can increase a nation’s efficiency
Govt.’s spend $$ investing in new tech., education and training for workforce
Go back and answer Chapter Essential ?
How can we make the best economic choices
Finish up any openings up to page 10

28. Lesson closing Work on Guided Reading Reviews Complete Case Study
Fill in Unit 1Body Paragraph
Pg. 31
HW: Ch.1 Study Guide