1. Burning Question #1 In 2-4 sentences tell me what is more valuable to you money or time? Why?
Name Period Burning Question #1 Your response… Bring your sheet up and place it on the desk.

2. What is Economics?
Economics- the study of how individuals, families, businesses and societies use their limited resources to fulfill their unlimited wants. Two Parts 1. Macroeconomics- deals with the economy as a whole and decision making by large units such as governments. (A specific tree in the forest) 2. Microeconomics- deals with behavior and decision making by small units such as individuals and firms. (All the trees in the forest)

3. Everyone Must Choose So What’s The Cost- Time, Money???
Economics- the study of how individuals, families, businesses and societies use their limited resources to fulfill their unlimited wants.
So What’s The Cost-
Time, Money???
Opportunity Cost- The value of the next best alternative.

4. Why Choose? Wants vs Needs
Scarcity- people do not and cannot have enough income or time to fulfill their every want.
Trade-offs- Exchanging one thing for another.
“I wanted a iPad3, however elected for the
Kindle Fire after seeing the price.”
“I choose to go to the movies rather than study for my economics exam.”
“I choose to eat at home rather than eat out.”

6. Guided Practice You pick anything you want!!!
You have a budget of $30.
You have a budget of $15.

7. Why Choose? Wants vs Needs
Scarcity- people do not and cannot have enough income or time to fulfill their every want.
Trade-offs- Exchanging one thing for another.
“I wanted a iPad3, however elected for the
Kindle Fire after seeing the price.”
“I choose to go to the movies rather than study for my economics exam.”
“I choose to eat at home rather than eat out.”

8. Check for Understanding
___________ = the study of how individuals, families, businesses and societies use their limited resources to fulfill their unlimited wants. ___________ = deals with behavior and decision making by small units such as individuals and firms. ___________ = people do not and cannot have enough income or time to fulfill their every want. ___________ = The value of the next best alternative that had to be given up to do the action that was chosen.

9. Scarce Resources Influences Production
5 factors of production 1. Land- Refers to natural resources that exist without human intervention. 2. Labor- The work people do to produce goods & services is a resource. -Good= tangible items people can buy (medicine, clothing, and computers) -Service= activities done for a fee. (maids, cooks, hairstylists etc…)

10. 5 factors of production
3. Capital- Manufactured goods used to make other goods. Buildings, trucks, factories etc…
-Increases productivity
Entrepreneurial Talent- Usefulness of individuals to START new facilities and BUILD new products and processes and IMPROVE management techniques.
(involves a willingness to take risks in order to reap profits)

11. 5 factors of production
5. Technology- Includes the use of land, labor or Capital to produce goods & services more efficiently.

12. Matching??? A- Land B- Labor C- Capital D- Entrepreneurial Talent
____ Includes the use of land, labor or Capital to produce goods & services more efficiently. ____ Manufactured goods used to make other goods. Buildings, trucks, factories etc… ____ Refers to natural resources that exist without human intervention. ____ Usefulness of individuals to start new facilities and build new products and processes and improve management techniques. ____ The work people do to produce goods & services is a resource.
A- Land
B- Labor
C- Capital
D- Entrepreneurial Talent
E- Technology

13. How Did You Fare? A- Land B- Labor C- Capital
E___ Includes the use of land, labor or Capital to produce goods & services more efficiently. C___ Manufactured goods used to make other goods. Buildings, trucks, factories etc… A___ Refers to natural resources that exist without human intervention. E___ Usefulness of individuals to start new facilities and build new products and processes and improve management techniques. B___ The work people do to produce goods & services is a resource.
A- Land
B- Labor
C- Capital
D- Entrepreneurial Talent
E- Technology

14. Win Lose or Draw 5 Factors of Production

15. “FOP” and “PPC”
Take out your books and turn to page 10. We will be reading aloud FOP “effect on income and wealth.” Take out your books and turn to page 17. We will be reading aloud “production possibilities curves”

16. Textbook page 18 Answer question 4 on page 19

17. The 3 Basic Economic Questions
All economic systems that have ever existed or will ever exist have to answer some basic questions. Let's explore the questions and some answers.
The 3 Essential Economic Questions
1 - What goods and services will be produced?
2 - How will the goods and services be produced?
3 – Who will get the goods and services?

18. Basic Economic Questions
Throughout history different countries have used different organizing methods to answer the basic economic questions. Focusing on the market system…
Some of the main characteristics of a market system are
Private property Freedom of enterprise and choice
Self-interest Competition
markets and prices Tech and capital
Specialization Use of money
of resources Active, but limited, gov

19. 1) What will be produced?
The answer to the first question is that we let the supply and demand of the market determine what and how much to produce. Goods that consumers are both willing and able to buy, and producers are willing and able to make, get made in the amount that both working together see fit.
Note consumers “vote” for goods to be made with their dollars and the goods are likely to be made if firms can make profit.

20. 2) How?
The answer to the second question is producers will use the least cost combination of inputs to produce a given level of output. The reason for this is twofold.
1. First, by using the least cost methods more profit will be earned by the producer. Producers certainly like to make profit.
2. But, the second reason is that if a producer does not use least cost methods of production, when other producers do, the high cost producer may not be able to compete with the other low cost producers and will eventually go out of business.

21. Resource use
Say there are three ways of making a good from a technical point of view. Here we list the number of units of each resource needed to make a good:
Resource technique 1 technique 2 technique 3
Land
Labor
Capital ET

22. Resource use
Next what each resource costs per unit and we can then see how much it costs to make the units under each technique. For now, let’s just say we look to the market to find what it costs to get each unit of each resource. Here technique 2 would be used!
Resource technique 1 technique 2 technique 3
Land $2 4 ($8) 2 ($4) 1 ($2)
Labor $1 1 ($1) 3 ($3) 4 ($4)
Capital $3 1 ($3) 1 ($3) 2 ($6)
Entrepreneurial $3 1 ($3) 1 ($3) 1 ($3)
ability
Total Cost $15 $13 $15

23. 3) For Whom?
The answer to the third question is those who are willing and able to pay for the items made. We become able to pay by giving up something that is valuable to us - labor or other assets.