DO NOW

Would you rather buy three (3) slices of pizza for $4 or six (6) slices of pizza for $5? Explain your reasoning!

CHAPTER IWhat is Economics?

SORT CARDS

Work individually to write down different topics that come to mind when you hear “economics”

Work in groups of four to review your topics by sharing ideas, clarifying ideas, and eliminating duplicates

Work with group to sort ideas into different categories

Walk around the room to explore other groups’ categories

One person from each group should stay behind to explain thinking of group as to why they had broken topics as such

Return to tables to add new topics, if necessary

Metacognitive processing: process how you went about your thinking as you generated, sorted, categorized, labeled, and analyzed the work of others

ECONOMIC CHOICES

Economics is about making choices

The “Economic Problem”: Although your wants, or desires, are virtually unlimited, the productive resources available to help satisfy these wants are scarce

Scarcity: condition facing all societies because there are not enough productive resources to satisfy people’s unlimited wants

ECONOMIC RESOURCES

Productive Resources: also known as “factors of production”, these are the inputs used to produce the goods and services that people want

Because productive resources are scarce, goods and services are scarce, too

Must choose between many wants

Problem of scarce resources but unlimited wants exists for every individual

Must make choices as a result!

ECONOMIC RESOURCES

Economics: examines how people use scarce resources to satisfy unlimited wants

Example: taxicab driver uses cab and other scarce resources, such as knowledge of city, driving skills, gasoline, and time, to earn income

Use income to buy housing, groceries, clothing, and vacation

ECONOMICS ON DISPLAY

Pair & Share: With a partner, give an example of using a scarce resource in order to earn an income based on the definition just provided.

This can be through any job within the career you’d like to have one day

Then explain what goods/services you may purchase with that income to satisfy your needs and wants

PRODUCTIVE RESOURCES

Include three (3) factors of production:

1. Human resources

2. Natural resources

3. Capital resources

PRODUCTIVE RESOURCES

Human Resources: broad category of human efforts, both physical and mental, used to produce goods and services

Labor: physical and mental effort used to produce goods and services

Comes from a more fundamental human resources: time

Allocate time according to alternative uses

You can have a job and earn or wage, or you can choose to spend your time sleeping…your choice!

PRODUCTIVE RESOURCES

Human resources include special skills of an entrepreneur, who tries to earn a profit by developing anew product or finding a better way to produce an existing one Profit provides incentive that makes

entrepreneurs willing to accept risk of losing money

PRODUCTIVE RESOURCES

Natural Resource: “gifts of nature”; include land, forests, minerals, oil reserves, bodies of water, and even animals

Renewable: can be drawn on indefinitely if used wisely

Examples include timber, air, water

Exhaustible: does not renew itself and is thus available in a limited amount

Examples include oil and coal

PRODUCTIVE RESOURCES

Capital goods: include all human creations used to produce goods and services

Consist of factories, tools, trucks, machines, computers, buildings, airports, highways, and other manufactured items employed to produce goods and services

All of these resources combined in variety of ways to produce goods and services

SCENARIOS

Role Play: Create a scenario in groups of five that depict a business using different types of resources (at least two of each type described above) Other groups must recognize at

least one example of each type of resource previously mentioned in the lecture)

NUMBERED HEADS TOGETHER

Each person of group assigned a number one through five

Each person must understand the answer to the question that will be posed

Once I call on a number, that person must be able to answer the question for their group

What are scarce resources and what would be the remedy to that scarcity? Come up with as many examples as possible in two minutes using the three types of resources just mentioned…winner gets…

GOODS AND SERVICES

Good: tangible – something you can see, feel, and touch

Example: corn

Farmer, tractor, 50 acres of land, seeds and fertilizer are all resources that create that good

Service: intangible – not physical, yet uses scarce resources to satisfy human wants

Skills or tasks performed in exchange for money

NO FREE LUNCH

Opposite sides of room: Are there goods/services you believe you can attain for free?

All goods involve a cost to someone

Your free lunch may seem free to you, but it draws scarce resources away from the production of other goods

Those who provide a free lunch often expect something in return

“The only place you find free cheese is in a mousetrap”

NO FREE LUNCH

A good or service is scarce if the amount people desire exceeds the amount available at a zero price

Things we want none of at a zero price are called bads

Clean air and clean seawater have become scarce

Goods that are truly free are not the subject matter of economics. Without scarcity, there would be no need for prices and no economic problem

CLOSURE

How is the question posed for the Do Now an economic choice?

How does it relate to the economic problem?