Daily Warm up Activity (HOT Section Notes): We have a Free Market Economy in the United States. What are some advantages of this kind of economy? We. However, do not have an unregulated free market system. What restraints/regulations are put in place to regulate trade?

Unit One: Learning Objectives:

•

North Clackamas School District Social Studies Priority Standards:

•

Econ 53.

Describe characteristics of command, market, traditional, and mixed economies and how they affect jobs and standards of living.

Econ 59.

Demonstrate the skills and dispositions needed to be a critical consumer of information.

Lesson Two: Daily Learning Target

I Can define and explain in writing the following key Economic concepts: Production Possibilities Graph Efficiency Underutilization

Producers have options. Should a farmer grow corn or broccoli?

A Production Possibilities Graph

• A Production Possibilities Graph shows alternative ways of using a country ’s or producer ’s resources.

• If a farmer uses more of his land to grow corn, he has less land for broccoli.

• Every decision has its cost.

What is the cost of producing more automobiles?

Efficiency

• An economy is efficient when it uses resources in such a way as to maximize production.

• Why is it important to be efficient?

Look at the graph. Where is efficiency occurring?

Look at this graph. Where is efficiency occurring?

Underutilization

• Underutilization is the opposite of efficiency.

• Underutilization occurs when an economy uses fewer resources than it is capable of using.

• Why do producers avoid the underutilization of resources?

Look at the graph. Where is underutilization occurring?

The Production Possibilities Frontier

• The line on the graph that shows the maximum possible production is called the production possibilities frontier.

• At the frontier, efficiency is occurring.

• However, new technology can shift the frontier. Think about it!

Look at the graph. Where is the production possibilities frontier?

Don ’t Forget Scarcity!

• A producer cannot produce everything.

• A producer must make choices.

• Remember: It’s all about scarcity. Our resources are limited but our wants and desires are unlimited.

It ’s all about corn or broccoli.

We can ’t have it all.

Questions for Reflection:

• What does a production possibilities graph show?

• Define efficiency.

• Why is it important to be efficient?

• Define underutilization.

• What problems are created by underutilization?

• What is the production possibilities frontier?

Use the following information to create a PPC for McDonalds during Lunch hour. Biff and Skip, working at maximum efficiency can produce the following two products:

Big Macs Large Fries 0 5 10 15 25 15 5 0 1. Plot a point showing Underutilization.

2. Plot a point showing future production possibilities.

Problem Solving Activity #3: Create two PPCs A. For Under Armor: B. For Starbucks Football cleats 25/0 Socks 100/0 Grande Mocha w/whip 10/0 Black Coffee (house blend) 18/0

Partner Practice-Econ Book

 Complete the Chapter One Assessment with partner.

 Answer questions 1-9 on page 20.

 Turn your answers into me.

 One paper per group of two.