1. American Economic Experience 8/18  EQ: What will I need to be successful in this class?  Bell Work: Sit at your desk from yesterday I ’ ll give you anything you want other than money.  Create a list of items that you want?  I Will: begin to think like an economist.

2. What WPHS and I Expect of You 1. Be Prompt 2. Be Prepared 3. Be Polite 1. Be NICE*** 4. Be Productive

3. Class Procedures School wide alert signal Sign out Tardy log Dismissal procedures

4. Material Needed  One pocket folder or 3-ring notebook with dividers  Blue or black ink pens  Pencils  Loose leaf paper

5. Absences and Make-Up  It is your responsibility to get all missed class work and make arrangements to take missed quizzes or tests.  ALL make-up work must be returned within 3 days following the absence.

6. Grading  Weighted Categories:  Tests/ Projects : 40%  Assignments : 30%  Quizzes: 20%  Homework: 10%

7. Fire Drill  Out the door to the right  Across the track

8. Bell Work:  I ’ ll give you anything you want other than money.  What do you want?  Would your list ever end?  Why not?  Scarcity!!!

9. What is Economics?  Economics is the science of scarcity.  Scarcity means that we have unlimited wants but limited resources.  Since we are unable to have everything we desire, we must make choices on how we will use our resources.  Economics is the study of choices

10. Definition Economics- Social science concerned with the efficient use of scarce resources to achieve maximum satisfaction of economic wants. (Study of how individuals and societies deal with Scarcity)

11.  Examples:  You must choose between buying jeans or buying shoes.  Businesses must choose how many people to hire  Governments must choose how much to spend on welfare. In economics we will study the choices of individuals, firms, and governments.

12. 5 Key Economic Assumptions 1.Society ’ s wants are unlimited, but ALL resources are limited (scarcity). 2.Due to scarcity, choices must be made. Every choice has a cost (a trade-off). 3.Everyone ’ s goal is to make choices that maximize their satisfaction. Everyone acts in their own “ self-interest. ”

13. 5 Key Economic Assumptions 4. Everyone makes decisions by comparing the marginal costs and marginal benefits of every choice. 5. Real-life situations can be explained and analyzed through simplified models and graphs.

14. Do you think Like an Economist?  In order for something to be scarce it must be limited and desirable

15. Textbook  Be sure to get a Principles of Economics book to take home

16. American Economic Experience 8/19  Bell Work: Finish your “Think Like an Economist” activity from yesterday.  In order for something to be scarce it must be limited and desirable

17. American Economic Experience 8/20  Bell Work: What does it mean for an item to be scarce?  What is the difference between trade-offs and opportunity cost?

18. Scarcity  Scarcity means that we have unlimited wants but limited resources.  Since we are unable to have everything we desire, we must make choices on how we will use our resources.

19. Trade-offs and Opportunity Cost ALL decisions involve trade-offs. The most desirable alternative given up as a result of a decision is known as opportunity cost. Trade-offs are all the alternatives that we give up whenever we choose one course of action over others. (Examples: going to the movies) What are trade-offs of deciding to go to college? What is the opportunity cost of going to college?

20. Econ of College

21. The 4 Factors of Production 21

22. The Four Factors of Production Entrepreneurship Capital Labor Land Producing goods and services requires the use of resources ALL resources can be classified as one of the following four factors of production: 22

23. Land = All natural resources that are used to produce goods and services. Anything that comes from “mother nature.” (Water, Sun, Plants, Oil, Trees, Stone, Animals, etc.) The Four Factors of Production Labor = Any effort a person devotes to a task for which that person is paid. (manual laborers, lawyers, doctors, teachers, waiters, etc.) 23

24. Two Types of Capital: 1. Physical Capital- Any human-made resource that is used to create other goods and services (tools, tractors, machinery, buildings, factories, etc.) 2. Human Capital- Any skills or knowledge gained by a worker through education and experience (college degrees, vocational training, etc.) The Four Factors of Production 24

25.  Entrepreneurship= ambitious leaders that combine the other factors of production to create goods and services.  Examples-Henry Ford, Bill Gates, Inventors, Store Owners, etc. The Four Factors of Production Entrepreneurs: 1.Take The Initiative 2.Innovate 3.Act as the Risk Bearers So they can obtain _________. Profit= Revenue - Costs PROFIT

26. TINSTAAFL  There is no such thing as a free lunch

27. TINSTAAFL  People face tradeoffs  Things always come with a Cost  To get one thing we have to give up something else  Food v. clothing  Leisure time v. work  Efficiency v. equity  Guns v. Butter http://www.youtube.com/watch?v=ie1XGTYueHw Jerry and his “free suit”

28. 3 Basic Questions 1. What to Produce? 1. Where should most of societies resources go? 2. How to Produce? 1. Machines vs. Human labor 2. Lower production costs vs. more jobs 3. For Whom to Produce? 1. Who should receive the finished product? 2. Should resources fulfill the needs of low income, middle income or high income

29. Production Possibilities Curve  What trade-offs are involved? 100 Units Guns Butter

30. Production Possibilities Curve  Represents the point at which an economy is most efficiently producing its goods and services  Is the economy allocating its resources in the best way possible?  Is the economy using all of its resources (land, labor, capital and entrepreneurs) efficiently?

31. Read Trade-offs, Opportunity Costs and Production Possibilities on pages 20 - 22  As you read, review the reading checks and economic analysis questions.

32. Production Possibilities Curve  What trade-offs are involved? 100 Units Guns Butter

33. Production Possibilities Curve  Create your own production possibilities curves showing a constant, opportunity cost, an increasing opportunity cost and zero opportunity cost for one of your two units.