The Beginning

We want everything for free!  Free T shirts at college  Free samples at Sam’s Club  BOGO tan  Is there such a thing as “FREE”?  There is no such thing as a free lunch?  Very few things in life are free. CLEAN air isn’t free!  Some where along the lines someone paid for it!!!

TINSTAAFL  Foreign Language or acronym?  Stands for: THERE IS NO SUCH THING AS A FREE LUNCH!!

PROBLEMS? IN THE US?  What could be the biggest problem in the United States?  Money?  NO!  Scarcity, the condition that arises because society does not have enough resources to produce all the things that people need and want!

What things are scarce? Let’s all be millionaires! What would we buy? Would we work? Would there be enough of goods and services? Money=no goods to buy=worthless Bread more valuable than money?

Factors of Production  1. Land, natural resources not created by human effort  Examples:  Enough of beaches for everyone to vacation at once?

 2. Capital, tools equipment and factories used in the production of good and services  It is a result of production  Examples?

 3. Labor, the people with all their abilities, skills and efforts  Can change, how? Why?

 4. entrepreneurs, the risk takers in our society  The people who open their own business and take a chance at losing big  THEY ARE THE DRIVING FORCE OF OUR ECONOMY!

More and more fun!! Can it get any better??? SECTION 2

WANT WANT  Can we have everything that we want?  Who has EVERYTHING that they want?  Life is not fair???  Sometimes we have to make alternative decisions called trade-offs  Could involve spending or time  Make quick decisions or based on criteria  Football game?

What should I do???  Go to the football game or go to work? That is the question. Well lets think about consequences with a decision making grid  They are helpful because they force you to consider a number of relevant alternatives AND CRITERIA you are basing your decision on

You can do that but it will cost you!!!!  When you make a decision there is an opportunity cost  Cost means more than a price tag, if your late for class what’s the cost?  It is an alternative that is given up  Wake up late for job and don’t go, opportunity cost of staying home is the oney lost from work!

I don’t understand  Economists find it easy to explain opportunity costs with a production possibilities frontier  A diagram representing various combinations of goods/services an economy can produce when all productive resources are fully employed

Chapter 1

I WANT WANT WANT WANT WANT  IS IT FEASIBLE TO HAVE ALL WE WANT AND NEED?  WHAT IS THE DIFFERENCE BETWEEN A WANT AND A NEED?  NEED IS A BASIC REQUIREMENT FOR LIVING  A WANT IS A MEANS TO EXPRESS A NEED  EXAMPLE: I WANT A PIZZA SATISIFIES A NEED FOR FOOD

HOW DO WE FEED OUR WANTS AND NEEDS?  ARE THERE HIGHER LEVELS OF NEEDS?  HUMAN ATTENTION  KNOWLEDGE  ECONOMICS IS CONCERNED WITH ECONOMIC PRODUCTS, GOODS AND SERVICES THAT ARE USEFUL, RELATIVELY SCARCE AND TRANSFERABLE TO OTHERS

TYPES OF ECONOMIC PRODUCTS  A GOOD, IS AN ITEM THAT IS ECONOMIC USEFUL OR SATISFIES AN ECONOMIC WANT, SUCH AS A BOOK OR CAR  A SERVICE, IS SOMETHING THAT IS PERFORMED BY SOMEONE ELSE  FOR EXAMPLE, A HAIRCUT, OR HOME REPAIRS

TWO TYPES OF GOODS  CONSUMER GOODS, ARE INTENDED FOR FINAL USE BY THE INDIVIDUAL  CAPITAL GOOD, IS A GOOD USED IN THE PRODUCTION FOR ANOTHER GOOD OR SERVICE  DURABLE GOOD, IS A GOOD THAT LASTS THREE YEARS OR MORE  NONDURABLE, DUH THE OPPOSITE

WE ARE ALL CONSUMERS  CONSUMERS INDULGE IN THE PROCESS OF CONSUMPTION, OR USING UP GOODS AND SERVICES TO SATISFY THEIR WANTS AND NEEDS  THEY ARE IMPORTANT BECAUSE WITHOUT THEM THE MARKET WOULD CRASH  WHEN WE PURCHASE SOMETHING, WE VOTE AND ITS POPULARITY

VALUE=$, OR DOES IT????  IN ECONOMICS WE REFER TO VALUE AS SOMETHING IN DOLLARS AND CENTS  WHY ARE SOME THINGS MORE EXPENSIVE THAN OTHERS?  PARADOX OF VALUE, WHAT APPEARS TO BE FASLE IS ACTUALLY TRUE  NECESSITIES SUCH AS WATER HAVE LITTLE MONETARY VALUE, YET A DIAMOND RING IS HIGH IN VALUE. WHY???????  IN A NUTSHELL, SCARCITY IS REQUIRED FOR VALUE

TO HAVE VALUE YOU NEED???  FOR SOMETHING TO HAVE VALUE IT MUST HAVE:  1. UTILIITY, TO BE USEFUL OR TO PROVIDE SATISFACTION  CAN THAT VARY???  2. SCARCITY, YOU CAN’T BUY IT ON THE STREET

I WANNA BE RICH, LAAA LAAA LAAA!!!  OH TO BE RICH, EVERYONE WANTS TO HAVE WEALTH RIGHT??  WEALTH, IS THE ACCUMULATION OF THOSE PRODUCTS THAT ARE SCARCE, TANGIBLE, USEFUL AND TRANSFERABBLE FROM ONE PERSON TO THE NEXT

HOW DO I GET WEALTHY??  WEALTH IS MADE POSSIBLE BY THE CIRCULAR FLOW OF ECONOMIC ACTIVITY  WHEN BUYERS AND SELLERS IN A MARKET EXCHANGE CERTAIN PRODUCTS  WE GET ECONOMIC GROWTH WHEN THE TOTAL OUTPUT OF GOODS AND SERVICES INCREASES OVER TIME

KEY FACTORS IN ECONOMIC GROWTH  EFFECTIVE MARKET  PRODUCTIVITY, A MEASURE OF THE AMOUNT OF OUTPUT PRODUCED BY GIVEN AMOUNT OF UINPUT IN A SPECIFIC TIME

DIVISION OR LABOR AND PRODUCTIVITY???  HOW CAN AN ASSEMBLY LINE WORK BETTER THAN EVERYONE HAVING TEN JOBS???  SPECIALIZATION, EVERYONE GETS BETTER AT ONE JOB RATHER THAN THREE  HUMAN CAPITAL, SUM OF THE SKILLS, ABILITIES, HEALTH AND MOTIVATION OF PEOPLE

ARE WE DEPENDENT ON ASIA, GERMANY??  YESSSSSSSSS, WE ARE ECONOMICALLY INTERDEPENDENT, MEANING WE RELY ON OTHERS FOR GOODS AND SERVICES AND THEY RELY ON US  EXAMPLE ANYONE?????

REST OF THE WEEK  WORK ON HOT DOG STANDS  CURRENT EVENTS FIRDAY AND REVIEW  TEST ON TUESDAY  BUSINESS PLAN STUFF ????