Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
What is Economics?
A
science that deals with the allocation, or use, of scarce resources for the purpose of fulfilling societys needs and wants. Addison-Wesley
OBJECTIVES 1.1
EXPLAIN why scarcity and choice are basic problems of economics IDENTIFY land, labor, and capital as the three factors of production, and identify the two types of capital EXPLAIN the role of entrepreneurs EXPLAIN why economists say all resources are scarce
What is Economics?
So
then the big two concepts are that: Resources are scarce! Society has unlimited needs and wants!
Economics decides the best way of providing one to the other
VOCABULARY:
Need Want Economics Goods Services
Scarcity
Definition A
situation in which the amount of something actually available would not be sufficient to satisfy the desire for it, if it were provided free of charge.
MORE VOCABULARY
Shortage Factors of Production Land Labor Capital Physical Capital Human Capital
Factors of Production
There
are 4 factors that must all be used to produce anything Natural Resources (also referred to as land)
Factors of Production
There
are 4 factors that must all be used to produce anything Labor effort of a person for which they are paid
Factors of Production
There
are 4 factors that must all be used to produce anything Capital human-made resources used to create other goods
Factors of Production
Kinds of Capital Physical Capital Also called Capital Goods, objects that are used to produce other goods
Factors of Production
Kinds of Capital Human Capital knowledge or skills workers get from education and experience
Factors of Production
There
are 4 factors that must all be used to produce anything Entrepreneurship person who takes a risk in combining the other 3 factors to create a new good
VOCABULARY CONTINUED
Entrepreneurs
FACTORS of PRODUCTION
IN N OUT
decision we make involves trade-offs alternatives that we must give up when we make a choice
Example
Capital and Land Scarcity and shortages Technology and productivity economics and business decisions
Answer is
Next question
2. Which of the following is an example of using physical capital to save time and money?
a. hiring more workers to do a job? b. building extra space in a factory to simplify production c. switching from oil to coal to make production cheaper d. lowering workers wages to increase profits
Answer is
next question
Answer is
c. human capital
next question
Answer is
c. a person who starts an all-organic cleaning supplies business that employs others
Next
answer
next.
answer
Hawaii
Paris Dunns River Falls, Jamaica Volunteer: What is your first choice? What is your second choice?
Ireland
Alaska
most desirable of the options you pass up is called the Opportunity Cost Rank sleep, studying, and playing video games 1st, 2nd, and 3rd on a list for what you value the most
Place is what you would choose to do 2nd Place is your opportunity cost (you give it up to do option 1)
other option do you have other than using 3 hours for one task? You could split your time among multiple activities! Thinking at the Margin decision involving adding one unit and subtracting one unit, rather than all or nothing
B on Test
B+ on Test
2 hours of sleep
3 hours of sleep
is a point at which you are paying the same increase in cost, but seeing lower benefits You must make the decision as to whether the cost is worth it This same process is used by businesses and consumers to make decisions
a. a person can spend extra money either on sports equipment or food. b. a company must decide whether to manufacture guns or butter c. a government must decide whether to produce more or less military or consumer goods d. a government can buy unlimited military and civilian goods if it is rich enough
answer
c. a government must decide whether to produce more or less military or consumer goods trade off . due to scarcity!
next..
2. If a person who wants to buy a compact disc (CD) has just enough money to buy one, and chooses CD A instead of CD B, then CD B is the
a. b. c. d.
answer is
b. opportunity cost
next
examining opportunity costs selling goods or services making marginal decisions identifying shortages
answer is ..
next
answer
GRAPHS.
WHY do graphs sometimes show information more clearly than text or tables?
Production Possibilities
Production
Possibilities Graph shows alternatives to what an economy can produce Lets say we can produce 2 things: Guns and Butter
Production Possibilities
Production Possibilities
Production
Possibilities Graph shows alternatives to what an economy can produce The outer red line shows the maximum possible output with any given combination This is the Production Possibilities Frontier (or Curve)
Production Possibilities
To
move from one point to another, the economy must make tradeoffs
Production Possibilities
Any
point along the line shows the economy operating at maximum efficiency Any point below the line is underutilization they are not getting all that they could Any point above the line is presently impossible, until new resources are available
Production Possibilities
Why
does the graph curve instead of making a straight line? Law of Increasing Costs as production increases for one item, more and more resources are necessary to increase production of the second item! The OPPORTUNITY COST increases
Production Possibilities
Every
and cows make butter Metals and factories make guns and many times you hear about butter vs. guns due to military spending on weaponry using resources To convert butter production to guns, you must sell the cows and build new factories on the land
quiz time
Number your paper 1 4 1. A production possibilities curve shows the relationship between the production of:
a. b. c. d.
farm goods and factory goods two types of farm goods two types of factory goods any two categories of goods
answer
next
2. The line on a production possibilities curve showing the relative amounts of two types of goods produced using all resources is called the
a. b. c. d.
production possibilities frontier opportunity cost line utilization of resources maximum possible production line
answer
question
3. The law of increasing costs means that as production shifts from one item to another,
a. the cost of production gets cheaper and cheaper. b. the cost of producing an item stays the same no matter how many are produced. c. more and more resources are necessary to increase production of the second item d. the land costs of increasing production rise much more steeply than do the labor costs
answer is
c. more and more resources are necessary to increase production of the second item
4. The curve usually seen in a production possibilities frontier can be explained by:
a. b. c. d.
growth in the economy underutilization of resources increasing an economys efficiency the law of increasing costs
final answer is
producing the maximum amount of goods and services .. now thats efficient!