1. What is scarcity? (Look in your notes) Why is scarcity an important factor in economics? (Look up the definition of economics) How does scarcity effect the price of goods and services? 6 Sentences

2. Principles of Economics

3. Goal 7 The learner will investigate how and why individuals and groups make economic choices.

4. Objective 7.01: Describe the basic factors of production their impact on economic activities. 7.02: Explain how scarcity influences producers and consumers to make choices.

5. What is Economics? Broken down into 2 definitions 1: study of how we make decisions in a world in which resources are limited 2: How things are made, bought, sold and used

6. Micro vs. Macroeconomics Microeconomics: Looks at the little picture. How people and small business function in an economy Macroeconomics: Looks at the big picture. How governments or whole industries or societies function in an economy

7. Scarcity Scarcity: when we do not have enough resources to produce all the things we would like to have

8. Vocabulary Goods: tangible products that we use to satisfy our wants and our needs Service: Work performed by a person for someone else Production: The process of making something Gross Domestic Product (GDP): total dollar value of all final goods and services produced in a country during a single year

9. Vocabulary Consumer: Person buying or using the good Producer: Person making a good Pricing: How much something costs Wages: Paid by the hour Salary: Paid an agreed upon sum for all the work Write 3 examples each of salaried jobs and wage jobs Write 3 examples each of salaried jobs and wage jobs

10. Basic Economic Questions What goods and services should be produced? How should the goods and services be produced? How should the goods and services be produced? For whom should the goods and services be produced? For whom should the goods and services be produced?

11. Starting a Business In order to start a business you must first answer the 3 economic questions. Get with a partner and figure out a product to sell by using the 3 economic questions.

12. What impact will the scarcity of a resource have on consumers? A.A surplus of certain products will occur. B.The cost of certain products will increase. C.A desire to own certain products will increase. D.The purchase of certain products will cease.

13. How will a scarcity of jobs impact industrial production? A.Production will increase B.Production will decrease C.Production will not change D.Production cannot be determined

14. Cause and Effect Maps What will happen to production, price, profit if there is a scarcity of labor? What Will happen to production, price, and profit if there is a good orange crop in Florida? What will happen to Production, price, and profit if a heavy freeze kills the orange crops in Florida? What is the relationship between scarcity, production, and price?

15. Factors of Production Factors of Production: Resources necessary to produce goods and services 1.Land (natural Resources): Resources from nature 1. Ex: Surface land, water, fish, animals, forests, mineral deposits 2. Renewable Natural Resources: Resources that grow back. 3. Non Renewable Natural Resources: Once you run out, you can’t get anymore 2.Labor: nations work force

16. Cont.. 3.Capital: Manufactured goods used to make other goods and services. 1. Machines, building, tools 4.Entrepreneurship: person who starts new business, introduces new products, improves process 1. Important to economy b/c they provide jobs, goods and services

17. Which factor of production does each picture illustrate

18. Which factor of production involves the worker and the value of his/her time A.Land B.Labor C.Capital D.Entrepreneurship

19. Which factor of Production would natural resources be? A.Land B.Labor C.Capital D.Entrepreneurship

20. If there is a large migration of workers from the north to the south, which factor of production would be the most effected? Land Labor Capital Entrepreneurship

21. Factors of Production Choose a good and figure out what factors of production you will need to make those goods On a sheet of paper, draw and color your good in the center. In each corner of your paper list your factors of production i.e. Land in the top left corner, labor in the top right corner, capital in bottom left corner, Entrepreneurship in the bottom right corner Explain how each is used

22. Wants vs. Needs Want: things we would like to have (Instant gratification: You get reward right away) Need: things required for survival

23. Trade Offs and Opportunity Costs Trade Off: When you have to choose one thing or another Opportunity Costs: What it costs you to choose one thing over another

24. If Mrs. Dorencamp has tickets to the super bowl on Sunday or can go to a party and she chooses to go to the super bowl, what is her opportunity cost? A. A.The cost of the football tickets B. B.The fun she will have at the party C. C.The cost of gas to the stadium D. D.Her friends will never talk to her again

25. What type of economy is the American Economy? How can you tell Hint: Think about factors of production, economic questions, consumer sovereignty.

27. Goal 8 The learner will analyze features of the economic system of the United States.

28. Objective 8.03: Explain the circular flow of economic activities and how interactions determine the prices of goods and services.

29. What is a market? Free and willing exchange of goods and services between buyers and sellers. What do markets have to do with economics?

30. Circular Flow of Economic Activity Circular Flow Model: shows how markets interact 4 Sectors Sector: Part 2 Markets 1. Consumer Sector Factor Markets (household): where the factors of production are bought and sold Factor Markets (household): where the factors of production are bought and sold consumers earn income (wages, salary) Businesses buy factors of production

32. Circular Flow of Economic Activity 2. Business Sector Product Markets (business): where producers offer goods and services for sale Sell goods and services to consumers and receive payment Sell goods and services to consumers and receive payment Use payment to pay for factors of production Use payment to pay for factors of production FOP used to make more goods to sell to make more money FOP used to make more goods to sell to make more money

34. Circular Flow of Economic Activity 3. Government Sector Made up of all 3 levels of gov’t Revenue: income gov’t collects for public use Revenue: income gov’t collects for public use From taxes Expenditure: expense or money spent Expenditure: expense or money spent Purchases goods from product markets Purchases goods from product markets

36. Circular Flow of Economic Activity 4. Foreign Sector: all countries in world we trade with Buy and sell goods to and from other countries Economic Interdependence: we rely on others, and others rely on us to provide goods and services

37. Bellringer What impact does government regulation have on the circular flow model? 4 sentences

38. The Market Game The Point of the game The Consumers with the most goods and services wins The Producer with the most money in the end wins Draw the Circular Economic Flow model Label each interaction on your model in the correct market Circle your sector