1. CHAPTER 1 SECTIONS 1/2 BASIC ECONOMIC CONCEPTS
ECONOMICS
CHAPTER 1
SECTIONS 1/2
BASIC ECONOMIC CONCEPTS

2. ECONOMICS
ECONOMICS IS THE STUDY OF HUMAN EFFORTS TO SATISFY WHAT APPEARS TO BE UNLIMITED WANTS THROUGH THE CAREFUL USE OF RELATIVELY SCARCE RESOURCES
DESCRIPTION: what is produced and who gets how much, as well as with topics such as inflation, unemployment, trade, etc.
ANALYSIS: Ex. Why are incomes higher in some states than in others?
EXPLANATION: communicating the knowledge of the analysis
PREDICTION: anticipating the likely consequences of different courses of action

3. Scarcity
Fundamental problem facing all societies that results from a combination of scarce resources and people’s seemingly unlimited wants

4. FACTORS OF PRODUCTION
CAPITAL: the tools, equipment, and factories used in the production of goods and services
ENTREPRENEURS: is a risk taker in search of profit
LAND: Refers to the “gifts of nature” or natural resources
LABOR: people with all their efforts, abilities, and skills

5. Think – Pair - Share
What are the factors of production that go into producing a t-shirt?

6. THREE BASIC QUESTIONS WHAT TO PRODUCE? Military equipment or housing
HOW TO PRODUCE?
Assembly line or more workers
FOR WHOM TO PRODUCE?
Workers or professionals

7. CHOICES
TRADE-OFFS: alternative choices, when spending your income or time
OPPORTUNITY COSTS: The cost of the next best alternative use of money, time, or resources when one choice is made rather than another

9. Adam Smith - Summary
Productivity: more highly skilled workers, new technology, and specialization led to greater technology
Wealth: sum of all the nation’s goods produced by labor, regardless of who owns those goods
The Invisible Hand: competition and the market system working together guiding resources to their most productive use
The Role of Government: government intervention in the economy should be kept to a minimum
Laissez-Faire: meaning no government intervention in economic affairs

10. Think – Pair - Share What are you going to do after graduation?
What are the trade-offs you are evaluating in making that choice?
If you have already made a choice, what is its opportunity cost?

11. PRODUCTION POSSIBILITIES FRONTIER
A DIAGRAM REPRESENTING VARIOUS COMBINATIONS OF GOODS AND SERVICES AN ECONOMY CAN PRODUCE AT FULL PRODUCTION
USE THE WHITEBOARD AND MARKERS TO COMPLETE THE PRODUCTION POSS. FRONTIER