1. ECONOMICS Chapter 1 What is Economics?

3. Brain Storm At the top of your paper write down everything that you would like to do today Next approximate time this will take You are in school for 8 hours, have 2 hours of homework, must eat dinner with your family for an hour and must sleep for 8 hours. This leaves you 5 hours to complete everything you want. Do you have enough time? What would you choose.

4. Cave-onomics 1.Why did Glug and Ug trade at the beginning of the video? 2.What is the continued exchange of money, goods, and services called? 3.What is innovation? What drives it? 4.What is the purpose of government in economics?

5. A) What is Economics 1.The study of the choices that people make to satisfy their needs and wants is economics. 1.People must make choices because of their unlimited wants and needs and limited resources 2.The person who studies economic _systems is an _economist.

6. Exit Ticket-This will be graded you are able to use notes try not to though True/False 1.Competition drives innovation. 2.Economics is the study of choices 3.People make choices because they have unlimited resources

7. End Day 1

8. B) Economic Actions – Two Classifications 1. Microeconomics – choices made by: a) Households b) Companies c) Individual markets_ 2. __Macroeconomics_ – the behaviors of entire economies: a) Unemployment in the U.S.

9. C) Economic Decisions 1. To think economics, pay attention to the _money_ decisions you make. 2. Everyone makes economic decisions. Ex. Kids to govts. –Two large groups of decision makers: a) __consumers_– the people who decide to buy things b) __producers_ – the people who make things to satisfy needs and wants

10. Wants vs. Needs 1. People make their Economic decisions based on __needs___ and _wants___ to satisfy desires for goods and services. 2. _Needs_ are those goods and services necessary for survival. Ex. Food, shelter, etc… 3. _Wants__ are goods and services beyond what is necessary for survival. Ex. Magazines, TV's, cell phones, etc… 4. __Goods___ are objects that can be purchased. Ex. stuff… 5. _Services__ are actions or services that are performed for a fee. Ex. movies, Tiger tickets, the plumber

11. D) Economic Resources______ 1. Human resources___ are any human effort exerted during production. Ex. migrant workers 2. _Capital__resources are the _manufactured materials_ used to create products. Ex. steel, aluminum, lumber, etc… 3. Capital _goods_____ are the machinery, buildings, tools used in producing products. Ex. robotic welders. 4. Natural__resources – produced by _nature_and used to produce goods and provide services. Ex. salt, ores, timber, etc…

12. 5. Consumer_goods are the goods and services that people buy. Ex. Cars, food, skis and snowboards, etc… 6. Some products can be __either_ consumer or capital goods. Ex. The truck used as a family car or to pull the landscaping trailer. 7. Technology_ is used to improve new or existing products. 8. Entrepreneur_ is a person who attempts to start a new _business_ or introduce a new _product__ – risking economic failure. Ex. Croc whole fillers

13. E) Economic Questions 1.People decide how to _allocate__ resources to satisfy the greatest number of needs and wants. 2.To allocate resources effectively, economic systems or societies must address three basic economic questions. a)What_ to produce– What are the needs and wants of society? Ex. guns vs. butter b)How_to produce – What resources to use, methods of production? Ex. labor intensive vs. technology c)For whom_to produce – Who gets the product or service and how will they get it? Ex. cell networks in rural areas

14. F) Productivity 1. A society must determine how to use its _resources___ effectively. 2. Productivity__ is a level of output that results from a given level of input. Ex. Hershey’s – m & m’s or candy bars today? 3. Efficiency is the use of the smallest amount of resources to produce the greatest amount of output.

15. G) Trade Offs and Opportunity Costs 1. Trade-offs occur because of _limited__ resources, one good is sacrificed for another. Ex. corn for food or fuel??? 2. Opportunity cost is the value of the next best alternative given up to obtain that item. Ex. buy the mini-van vs. the convertible

16. H) Exchange 1.Exchange_ is when producers and consumers decide to provide one type of item in return for another. 2.Forms of exchange: a)Barter_ – exchanging one set of goods for another Barter relies on bargaining b) _Money_ – a standardized means of exchange

17. (Money continued…) 1. __Money_ has three functions: Standardized item easily traded for _goods_ and __services__ Standardized item easily traded for _goods_ and __services__ Measure of value that has a common worth Measure of value that has a common worth A store of __value_ that can be used at a later date A store of __value_ that can be used at a later date

18. c) Credit allows consumers to pay for an item over a specified period of time. 1. Credit allows _consumers_ to use an item before completing payment. 2. Consumers who fail to pay may lose the _merchandise__(stuff) and/or lose future credit.

19. Opportunity Cost Activity p. 28 Create a list of all trade offs for you being in school (must have at least 10) Create a list of all trade offs for you being in school (must have at least 10) Circle the opportunity cost. Circle the opportunity cost. Write 2 sentences on why this is your opportunity cost. Write 2 sentences on why this is your opportunity cost.