Economic Decision Making Part B Ms. Ramos Alta Loma High School.

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Presentation transcript:

Economic Decision Making Part B Ms. Ramos Alta Loma High School

What do we give up when we make a choice? Ms. Ramos

Maximizing utility: What we want when we choose  Utility: satisfaction from a good, service, or action--- also may be that it improves your life Vaccination Vaccination Studying Studying Ms. Ramos /prevention.html pment/ENewsletter/Volume3/ Issue08-07.aspx illustration silhouette-couples- dresses-up-party-dress-formal.php

Which show to watch? Which show to watch? Which college to go to? Which college to go to? st-blog-mtvs-jersey-shore/ family-guy-online / College-WHDDT44LXT.html ogo.php?id= Resources/Discounts/Education/tabi d/1220/Default.aspx ard-killer-captured Ms. Ramos

Tradeoffs: what we give up when we choose  Business Build trucks or cars Build trucks or cars Make trucks, tradeoff: % car market Make trucks, tradeoff: % car market  Society Guns vs. butter Guns vs. butter Military or civilian goods/programs Military or civilian goods/programs  Personal Ms. Ramos

Opp Cost: The best thing we give up to get what we want  Decision matrix Ms. Ramos SourcePriceDeliveryCost Transaction Time Delivery Time Online Store min 7 min to dwnload Catalog min 1 wk for shipping Big Box Store gas money 1 hr or more none

RestaurantCostTime Yummy Factor Ms. Ramos

Making “How Much” decisions at the margin  Marginal utility: extra satisfaction from consumption/action  Negative utility: lack of pleasure from consumption/action  Law of diminishing marginal utility Ms. Ramos

diminishing-marginal-utility/

How can we measure what we gain and lose when making choices? Ms. Ramos

Measuring tradeoffs using the production possibilities frontier Ms. Ramos /

Measuring Opportunity Costs using the PPF Ms. Ramos

Ms. Ramos What does the curve illustrate? Increasing costs

Measuring economics efficiency using the PPF Ms. Ramos

Measuring economics efficiency using the PPF Ms. Ramos unattainable Attainable, but inefficient

Reflecting economic change using the PPF Ms. Ramos / Change in productivity

Shift out means what? Increase- growing economy Ms. Ramos

 Remember: Shift to the right- increase/growing economy Shift to the right- increase/growing economy Shift to the left- decrease/shrinking economy Shift to the left- decrease/shrinking economy Pt w/in curve= inefficiency Pt w/in curve= inefficiency Pt outside curve= unattainable Pt outside curve= unattainable Ms. Ramos

Ms. Ramos

STUDY!!! STUDY!!! STUDY!!!  The unit exam will have the following: Fill in vocabulary Fill in vocabulary objective (multiple choice & graphs) objective (multiple choice & graphs) 2 short answer prompts- you will be given the two & NOT have a choice this exam 2 short answer prompts- you will be given the two & NOT have a choice this exam Ms. Ramos