Economic Way of Thinking Please get your IENB from your class bin. Then turn to page 12.

Economic Way of Thinking STEP 1: Label page 12 Economic Way of Thinking

STEP 1: Label page 12 Economic Way of Thinking STEP 2: On a post-it please write the GPS and goals of this lesson. Standard: SSEF1 GOALS: 1)Discuss economic reasoning. 2) Define & identify scarcity. 3) State 3 basic economic questions. 4) Define & identify the factors of production.

Economic Way of Thinking STEP 3: Glue the “Guide to Economic Reasoning” in top center of your page 12. STEP 4: Highlight or circle the words in italics.

Guide to Economic Reasoning 1.People choose. 2.People’s choices involve costs. 3.People respond to incentives in predictable ways. 4.People create economic systems that influence individual choices and incentives. 5.People gain when they trade voluntarily. 6.People’s choices have consequences that lie in the future.

So why do we study economics???

Because ECONOMICS is…  Economics is the study of how individuals/households, businesses/firms and countries make decisions about how to use their resources.

Why do people have to make choices? SCARCITY

SCARCITY… Lack of something rare Very low amount shortage Not having enough Having unlimited wants and a limited amount of resources

SCARCITY… Situation in which a resource has more than one valuable use

Scarcity is the basic economic problem, every society is trying to answer 3 basic economic questions: 1) What to produce? 2) How to produce it? 3) For whom to produce it for

Practice- Use the 1 st definition to determine if resources are scarce. - Glue in Activity 1 onto page Read the directions. - Then complete the assignment.

Practice- Use the 2 nd definition to determine whether resources are scarce. You will need to glue this in as well.

Factors of Production: These are the inputs/resources that r used to make final goods/services; includes: land, labor, capital and entrepreneurship LAND: CAPITAL:LABOR: ENTREPRENEUR :

Factors of Production:

LAND  Includes resources that are “gifts of nature” or natural resources  Not man made  EX: trees, oil, diamonds, cows, raw materials, water, gold All natural resources, also known as “gifts of nature”

LABOR: Any man-made resource used to make a final product

People doing work for pay

ENTREPRENEUR  Start the business  Willing to take risk  Incentive is profit

Please, put your notebook back in the bin.

On your phone go to m.socrative.com  Room #  Teacher Questions…  What is your favorite food?