Opportunity Cost Review Complete the activity sheet with your elbow partner. Everyone must fill out their own sheet. After the sheet is complete, on the back, write your own Opportunity Cost Scenario for your partner to answer. I will choose 5 groups to share there scenarios with the class. One person will read the scenario and the other will give the answers.

Warm-up Define Economics. Describe needs and wants. List the four factors of production. Give 5 examples for each factor of production. Which factor of production is the most important? (trick question)

Revenue, Profits, and Economic Activity

What is Revenue? Revenue is the amount of money received by a company for goods or services sold during a certain period of time Goods- tangible items that are bought and consumed; objects Examples- food, clothing, tools Services- something that someone does for you; hiring people to perform work for you; actions Examples- hair cut, car repair, doctor visit

Types of Revenue Total Revenue is number of units sold multiplied by the price per unit 42 units of a product are sold at $2 each, the total revenue is $84 Marginal Revenue is the extra revenue that results from selling one more unit of an output

Profit A company’s goal is to make as much profit as possible Profit is money a company has made after costs have been deducted Companies can increase profit by maximizing efficiency in production. Often, by adding more land, labor, or capital, companies can increase their profit

Cost-Benefit Analysis Cost-Benefit Analysis- an economic decision making technique that tells us to choose an action or make a decision when the benefits are greater than the costs Marginal Benefits- the additional satisfaction or benefit when one more unit is produced

Diminishing Marginal Benefit Diminishing Marginal Benefit- the point at which producing more of the product or service is no longer beneficial Example- Say you have a test and you study for a few hours. After a while you feel like you've covered everything. At that point, there's only so much more benefit you can get from studying more, so you're experiencing diminishing marginal benefit. You already know enough to get a 100, why study more?

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Economic Activity Markets- a free and willing exchange of goods and services between buyers and sellers (not necessarily a place) Factor Markets- markets where productive resources are bought and sold; products used for producing Product Markets- markets where producers offer goods and services to the consumer