1. STARTER How do societies know what to do with the resources they have available? How do societies determine who controls the resources and the distribution of the resources?

2. CHAPTER 1.4, 2.1 ECONOMISTS TOOLBOX AND ECONOMIC SYSTEMS

3. WORKING WITH DATA Economic models Words Graphs Equations Understand which “Lens” you need to look through Micro vs. Macro Positive vs. Normative

4. MICRO VS. MACRO Microeconomics The study of individuals, families, and businesses Topics: prices, costs, profits, competition, and behavior of consumers and producers Macroeconomics The study of the economy as a whole and is concerned with large-scale economic activity Topics: Inflation, unemployment, aggregate demand, and aggregate supply Figure 1.11 (P. 28)

5. POSITIVE VS. NORMATIVE Positive Studies economic behavior as it is Verifiable facts, not judgments Uses scientific method (observe, hypothesize, test, refine, and continue testing) Normative Involves judgments of what economic behavior ought to be Based on value judgments Beyond facts to ask if actions are good

6. WHAT IS AN ECONOMIC SYSTEM? Economics is the study of how individuals and societies satisfy their unlimited wants with limited resources. An economic system is the way a society uses resources to satisfy peoples wants There are 3 main economic systems: Traditional Command Market

7. TRADITIONAL ECONOMY An economic system in which people produce and distribute goods according to customs handed down from generation to generation (Ex. “The way its always been done”) More common among families, clans, and tribes The ONE goal of these societies is survival Set roles and tasks Men: hunt and herd Women: crops and children Children: chores and learning skills No chance of deviation for own personal desires

8. COMMAND ECONOMY An economic system in which the government makes all economic decisions Government officials consider the resources available and allocate those resources according to their judgment of what the country needs Individual consumers are rarely considered Government owns all resources and factories (means of production)

9. MARKET ECONOMY An economic system in which individual choice and voluntary exchange direct economic decisions Based on individual choice, not government directives Consumers and producers drive this economy Freedom to act in your own self-interest