Ch. 1-2

Ch. 1-2Week of 8/26-8/30

BELLWORK- 8/26

Why do we have goods on our shelves in the stores. Who provides the goods? For EX: why are Coca-Colas for sale at stores?

BASIC ECON CONCEPTS

◦ Goods – items that are economically useful or satisfies an economic want Consumer Goods – used by individuals

Capital Good – Goods used to produce more goods ◦ Services – work that is preformed for someone◦ Consumer(s) – a person who uses a good or service

Dolla’ Dolla’ Bill Y’all….

• Value – worth that can be expressed in dollars • Utility – the capacity to be useful and provide

satisfaction • Wealth – is the accumulation of products that are

tangible, scarce, useful, and transferable from one person to another.

QUESTION-WHAT HAPPENS WHEN YOU HAVE BOTH

NECESSITIES AND LUXURIES?your standard of living increases

Have a Coke and a Smile

• How do you get the money to purchase the Coca-Cola? • How are these factors assembled into goods and services?• How do they end up on the shelf at a store? Why are there

goods for sale in the store? What does the business get from the sale of the good? What does the consumer get? How does the consumer get the money to buy products?

• http://education-portal.com/academy/lesson/circular-flow-of-economic-activity-the-flow-of-goods-services-resources.html

BELLWORK: 8/27

•HOW DOES A CONSUMER RECEIVE GOODS AND SERVICES?

Circular Flow Model

• A market is a mechanism that allows buyers and sellers to exchange a certain economic product.

• Factor Markets – are where productive resources are bought and sold.

• Product Markets – are where producers sell their goods and services to consumers.

Model Simulation

• Volunteers for Households/Consumers. • Volunteer to run a store to represent the Product

Marketsign• Who wants to be a CEO for Business/Headquarters? • Who wants to run a factory: Factor/Resource Market? • These volunteers will sit at the front and back and two

sides of the room with their placards. Representing consumers, businesses, factors of production markets (or resource markets), and product markets.

Simulating Each Exchange

Beginning with consumers and product markets:Ask how consumers obtain Coca-Cola (legally). Can you get it for free?

Simulation

•What does the store do after the exchange from the buyer? What did the store or product market volunteer receive for the dollar?

Simulation

• How do the Cokes get to the store? Did coca-cola headquarters get them for free?

Think Pair Draw

•Students will draw Circular Flow Model with a partner, to check for understanding

How to Increase Your Power…

• Economic growth occurs when a nation’s total output of goods and services increases over time.

• Economic productivity is a measure of the amount of output produced by a given amount of inputs during a specific period of time.

HUMAN CAPITAL

Human Capital is the sum of the skills, abilities, health, and

motivation of people.

EX: Government & Businesses can invest in human capital (labor) by providing education (training) and health care to improve the skill and motivation of its workers.

Get by with a little help from my friends

Economic Interdependence means that we rely on others, and others rely on us, to provide the goods and services that we consume.

BELLWORK: 8/28- Jerry Maguire

1)Identify the people in the movie who made a decision 2)what was the choice made 3)what was the second choice given up 4)what was the value of the choice given up (opportunity cost) 5)what was the reason for the choice taken.

The Labor Force

Division of Labor takes place when work is arranged so that individual workers do fewer tasks than before.Specialization takes place when factors of production perform tasks that they can do relatively more efficiently than others.

Allocation

1.What need will be satisfied?2.What resource will be used?3.How much of the resource will

be used?

Trade Offs

• Choosing among alternatives to satisfy Allocation• Very Similar to Opportunity Cost

Trade Offs and Opportunity Cost

Every decision we make has its trade-offs or alternative choices. When you make an economic decision (a choice) opportunity cost are incurred. Opportunity Cost -The value of what you give up when you make a choice. Opportunity Benefit -The value of what you gain by making that choice.

DOES THE United States USE THIS?

THE US IS A FREE ENTERPRISE ECONOMY: consumers and privately owned businesses make the majority of the WHAT, HOW, and FOR WHOM decisions

BELLWORK-8/28

DOES GOING TO SCHOOL HAVE TRADE- OFFS?

Trade Offs and Allocation

Students will be in groups of 4 to discuss:Identify your occupational aspirations and explain why you are considering these jobs/careers. Also explain what, if any, post high school education is necessary for these jobs/careers…..

What is the true cost of college?

STUDENT'S CHOICE

Connie plans to attend a state college and study to become an elementary teacher. Listed below are the costs of her choice.

Year *Direct Costs of College*: Opportunity Costs (Lost Wages)Year One $ 8,000 $16,000Year Two $ 8,500 $16,500Year Three $ 9,000 $17,000Year Four $ 9,500 $17,500Total $35,000 $67,000

Compute the total cost of Connie's decision (College Costs + Opportunity Costs) $_________________________

* Includes room, board, tuition, books and supplies, personal expenses, also includes projected inflation for each year.

An Economic Mystery

"When it takes, at least, an additional seven years of schooling, and over one hundred thousand dollars in costs and lost earnings, why would a person want to graduate from college instead of dropping out after the ninth grade?"

What is the most important factor when considering college?

1. People economize. People choose the alternative which seems best to them because it involves the least cost and greatest benefit.

2. All choices involve cost. Cost is the second best choice people give up when they make their best choice.

3. People respond to incentives. Incentives are actions or rewards that encourage people to act. When incentives change, people's behavior changes in predictable ways.

4. Economics systems influence individual choices and incentives. How people cooperate is governed by written and unwritten rules. As rules change, incentives change and behavior changes.

5. Voluntary trade creates wealth. People can produce more in less time by concentrating on what they do best. The surplus goods or services they produce can be traded to obtain other valuable goods or services.

6. The consequences of choices lie in the future. The important costs and benefits in economic decision making are those which will appear in the future. Economics stresses making decisions about the future because it is only the future that we can influence. We cannot influence things that have happened in the past

A city council meeting is called to allocate a budget of $100,000. The council would like to buy four new police cars at $25,000 each, two senior-citizen centers at $50,000 each, and build two new tennis courts at $50,000 each. Explain why a choice must be made, decide how the city council should spend its money, describe how the city council should spend its money, describe the trade-offs made, and identify the opportunity cost of the decision.

Bellwork 8/30

Explain: There is no such thing as a free lunch.

In your groups analyze the following situations:

You are a member of your state’s legislature, and there is a $500,000 surplus in the state budget. How much of that $500,000 would you spend on each of the following programs: aid to the homeless, money to retrain unemployed workers, aid to schools in poor neighborhoods, improvement of state roads, or money for the state society for prevention of cruelty to animals? Explain why you chose to support certain programs and to spend no money on others. What are the trade-offs? What is the opportunity cost of the choices that you made? [note: students should pick the top two choices and allocate funds into them

Production Possibilities Frontier

The various combination of goods and services that an economy can choose to produce. When an economy is operating at full capacity it is operating at maximum production. This is also known as the production possibilities frontier. Production possibilities help us understand the concept of opportunity cost.

Students will watch video of PPF to gain further understanding.

Explanation of Graph

If you are operating at maximum production, the only way to produce something new you must give up the production of another item. If you have economic growth you can push the curve outward allowing for more total production. (Population Growth, Improving Technology, or growth in the Capital Stock which are investments in factories, etc.) If you have idle resources (operating inside the curve) you will be able to produce more of both without giving up production.

Agenda

1. Students will complete worksheet2. After completed, students will take quiz.