Transcript Ch. 1-2

Ch. 1-2
Week of 8/26-8/30
Why do we have goods on our shelves in the stores. Who
provides the goods? For EX: why are Coca-Colas for sale at
stores?
BELLWORK- 8/26
◦ Goods – items that are economically useful or
satisfies an economic want
Consumer Goods – used by individuals
Capital Good – Goods used to produce more goods
◦ Services – work that is preformed for someone
◦ Consumer(s) – a person who uses a good or
service
BASIC ECON CONCEPTS
• Value – worth that can be expressed in dollars
• Utility – the capacity to be useful and provide
satisfaction
• Wealth – is the accumulation of products that are
tangible, scarce, useful, and transferable from one person
to another.
QUESTIONWHAT HAPPENS WHEN YOU HAVE BOTH
NECESSITIES AND LUXURIES?
your standard of living increases
Dolla’ Dolla’ Bill Y’all….
• How do you get the money to purchase the Coca-Cola?
• How are these factors assembled into goods and services?
• How do they end up on the shelf at a store? Why are there
goods for sale in the store? What does the business get
from the sale of the good? What does the consumer get?
How does the consumer get the money to buy products?
• http://education-portal.com/academy/lesson/circularflow-of-economic-activity-the-flow-of-goods-servicesresources.html
Have a Coke and a
Smile
• HOW DOES A CONSUMER
RECEIVE GOODS AND
SERVICES?
BELLWORK: 8/27
• A market is a mechanism that allows buyers and sellers to
exchange a certain economic product.
• Factor Markets – are where productive resources are
bought and sold.
• Product Markets – are where producers sell their goods
and services to consumers.
Circular Flow Model
• Volunteers for Households/Consumers.
• Volunteer to run a store to represent the Product
Marketsign
• Who wants to be a CEO for Business/Headquarters?
• Who wants to run a factory: Factor/Resource Market?
• These volunteers will sit at the front and back and two
sides of the room with their placards. Representing
consumers, businesses, factors of production markets (or
resource markets), and product markets.
Model Simulation
Beginning with consumers and product
markets:
Ask how consumers obtain Coca-Cola
(legally). Can you get it for free?
Simulating Each
Exchange
• What does the store do after
the exchange from the buyer?
What did the store or product
market volunteer receive for
the dollar?
Simulation
• How do the Cokes get to the store?
Did coca-cola headquarters get them
for free?
Simulation
• Students will draw Circular
Flow Model with a partner,
to check for understanding
Think Pair Draw
• Economic growth occurs when a nation’s total output of
goods and services increases over time.
• Economic productivity is a measure of the amount of
output produced by a given amount of inputs during a
specific period of time.
How to Increase Your
Power…
Human Capital is the sum of the
skills, abilities, health, and
motivation of people.
EX: Government & Businesses can invest in human capital
(labor) by providing education (training) and health care to
improve the skill and motivation of its workers.
HUMAN CAPITAL
Economic Interdependence means that we rely on others,
and others rely on us, to provide the goods and services that
we consume.
Get by with a little help
from my friends
1)Identify the people in the movie who
made a decision
2)what was the choice made
3)what was the second choice given up
4)what was the value of the choice given
up (opportunity cost)
5)what was the reason for the choice
taken.
BELLWORK: 8/28- Jerry
Maguire
Division of Labor takes place when work
is arranged so that individual workers do
fewer tasks than before.
Specialization takes place when factors
of production perform tasks that they can
do relatively more efficiently than others.
The Labor Force
1.What need will be satisfied?
2.What resource will be used?
3.How much of the resource
will be used?
Allocation
• Choosing among alternatives to
satisfy Allocation
• Very Similar to Opportunity Cost
Trade Offs
Every decision we make has its trade-offs or alternative
choices. When you make an economic decision (a choice)
opportunity cost are incurred.
Opportunity Cost -The value of what you give up when
you make a choice.
Opportunity Benefit -The value of what you gain by
making that choice.
Trade Offs and
Opportunity Cost
THE US IS A FREE ENTERPRISE ECONOMY:
consumers and privately owned businesses make the
majority of the WHAT, HOW, and FOR WHOM decisions
DOES THE United States
USE THIS?
DOES GOING TO SCHOOL
HAVE TRADE- OFFS?
BELLWORK-8/28
Students will be in groups of 4 to
discuss:
Identify your occupational aspirations
and explain why you are considering
these jobs/careers. Also explain what, if
any, post high school education is
necessary for these jobs/careers…..
Trade Offs and Allocation
STUDENT'S CHOICE
Connie plans to attend a state college and study to become an elementary teacher. Listed below
are the costs of her choice.
Year
Year One
Year Two
Year Three
Year Four
Total
*Direct Costs of College*:
$ 8,000
$ 8,500
$ 9,000
$ 9,500
$35,000
Opportunity Costs (Lost Wages)
$16,000
$16,500
$17,000
$17,500
$67,000
Compute the total cost of Connie's decision (College Costs + Opportunity Costs)
$_________________________
* Includes room, board, tuition, books and supplies, personal expenses, also includes projected
inflation for each year.
What is the true cost of college?
"When it takes, at least, an additional seven years of
schooling, and over one hundred thousand dollars in costs
and lost earnings, why would a person want to graduate
from college instead of dropping out after the ninth grade?"
An Economic Mystery
1. People economize. People choose the alternative which seems best to them because it
involves the least cost and greatest benefit.
2. All choices involve cost. Cost is the second best choice people give up when they make their
best choice.
3. People respond to incentives. Incentives are actions or rewards that encourage people to act.
When incentives change, people's behavior changes in predictable ways.
4. Economics systems influence individual choices and incentives. How people cooperate is
governed by written and unwritten rules. As rules change, incentives change and behavior
changes.
5. Voluntary trade creates wealth. People can produce more in less time by concentrating on
what they do best. The surplus goods or services they produce can be traded to obtain other
valuable goods or services.
6. The consequences of choices lie in the future. The important costs and benefits in economic
decision making are those which will appear in the future. Economics stresses making
decisions about the future because it is only the future that we can influence. We cannot
influence things that have happened in the past
What is the most important factor when
considering college?
A city council meeting is called to allocate a budget of
$100,000. The council would like to buy four new police
cars at $25,000 each, two senior-citizen centers at $50,000
each, and build two new tennis courts at $50,000 each.
Explain why a choice must be made, decide how the city
council should spend its money, describe how the city
council should spend its money, describe the trade-offs
made, and identify the opportunity cost of the decision.
Explain: There is no such thing as a free
lunch.
Bellwork 8/30
You are a member of your state’s legislature, and there is a
$500,000 surplus in the state budget. How much of that
$500,000 would you spend on each of the following
programs: aid to the homeless, money to retrain
unemployed workers, aid to schools in poor neighborhoods,
improvement of state roads, or money for the state society
for prevention of cruelty to animals? Explain why you
chose to support certain programs and to spend no money
on others. What are the trade-offs? What is the opportunity
cost of the choices that you made? [note: students should
pick the top two choices and allocate funds into them
In your groups analyze
the following situations:
The various combination of goods and
services that an economy can choose to
produce.
When an economy is operating at full capacity
it is operating at maximum production. This
is also known as the production possibilities
frontier.
Production possibilities help
us understand the concept
of opportunity cost.
Production Possibilities
Frontier
Students will watch video of PPF to
gain further understanding.
If you are operating at maximum production, the
only way to produce something new you must give
up the production of another item.
If you have economic growth you can push the
curve outward allowing for more total production.
(Population Growth, Improving Technology, or growth in the
Capital
Stock which are investments in factories, etc.)
If you have idle resources (operating inside the
curve) you will be able to produce more of both
without giving up production.
Explanation of Graph
1. Students will complete worksheet
2. After completed, students will take quiz.
Agenda