ECONOMICS-THE STUDY OF HOW PEOPLE CHOOSE TO USE SCARCE RESOUCES TO SATISFY THEIR NEEDS AND WANTS.Needs- food, clothing and shelterWants: desires, luxury items

Economics involves: Examining how individuals, government, businesses and societies choose to

use scare resources to satisfy needs and wants. Organizing, analyzing and interpreting data about economic behaviors. Developing theories and economic laws that explain how the economy

works and to predict what might happen in the future.

                                              

  

                                                  

$130July

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$4.15

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- unlimited wants with limited resources..Wants are unlimited and ever changing

People satisfy needs and wants with goods and services

Goods- tangible items of value-Service-intangible items of valueConsumer- a person who buys goods and servicesProducer- a person who makes goods and provides services

Scarcity requires all societies to address the three basic economic questions

• What will be produced?• How will it be produced?• FOR WHOM WILL IT BE PRODUCED?

Scarcity-

What will be produced is based in part on the natural resources of the country and in some countries consumers and producers decide in other countries the government decides.What to produce also includes how much to produceEx: Wartime production differs from peacetime production.

How will it be produced-most efficient manner.Labor intensive- cost of labor relative to machinery is lessCapital intensive cost of machinery relative to labor is less.

For whom will it be produced- determined by who is willing to pay or should everyone get an equal share. Whom also involves a distribution system.

The Four Factors Of Production1. LAND- includes not only land but also water, minerals, forests, wildlife, gas, oil

2.Labor-human time, effort and talent that go into making a product or providing a service.

3. Capital- Factories, machines, tools and the money to buy them

Human Capital- education and training, and skills gained through experience.

4.Entrpreneurship- skills, vision and risk taking needed to create new products or innovate.

.Chinese ProverbThe family that perseveres in good works will surely have an abundance of blessings.Bill ClintonWe live in an interdependent world.  Every time you cut off somebody else's opportunities, you shrink your own horizons.ConfuciusWhen wealth is centralized, the people are dispersed. When wealth is distributed, the people are brought together.

Philanthropy Quotes

Acts 20: 35 It is more blessed to give than to receive

Diana, Princess of WalesNothing brings me more happiness than trying to help the most vulnerable people in society. It is a goal and an essential part of my life - a kind of destiny.Charles DickensNo one is useless in this world who lightens the burdens of another.Henry FordThe highest use of capital is not to make more money but to make money to do more for the betterment of life.Anne FrankHow wonderful that no one need wait a single moment to improve the world.Benjamin FranklinA man wrapped up in himself makes a very small bundle.I would rather have it said, 'He lived usefully,' than, 'He died rich.‘The practice of charity will bind us...will bind all men in one great brotherhood.Bob HopeIf you haven't got any charity in your heart, you have the worst kind of heart trouble.Lee IacoccaMy father used to say, 'You can spend a lot of time making money. The tough time comes when you have to give it away properly.' How to give something back, that’s the tough part in life.

Jane AddamsSocial advance depends quite as much upon an increase in moral sensibility as it does upon a sense of duty.AesopNo act of kindness, no matter how small, is ever wasted..Maya AngelouOne must know not just how to accept a gift, but with what grace to share it.AristotleTo give away money is an easy matter and in any man's power. But to decide to whom to give it and how large and when, and for what purpose and how, is neither in every man's power nor an easy matter.Henry Ward BeecherEvery charitable act is a stepping stone towards heaven.Michael BloombergEvery dollar makes a difference. And that's true whether it's Warren Buffet's remarkable $31 billion pledge to the Gates Foundation or my late father's $25 check to the NAACP..Pearl S. BuckThe test of a civilization is in the way that it cares for its helpless members.Andrew CarnegieWealth is not to feed our egos but to feed the hungry and to help people help themselves.

Scarcity forces all of us to make choices.In making choices we must consider the utility of the good or service we are going to purchase.

How do you measure utility?

Utils

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TRADE-OFFS AND OPPORTUNITY COST

Trade-off-the alternative you give up when you make an economic choice.

Opportunity cost-the value of the most desirable alternative not chose.

Opportunity Benefit-the benefit to you of the economic choice you made.

Cost-benefit analysis- examining cost and expected benefits

Decision making grid page 15 text.

Marginal cost and marginal benefit

PRODUCTION POSSIBILITIES CURVE

Assumptions1.Resources are fixed2. All resources are fully employed3.Only two things can be produced4.Technology is fixed

butter guns0 250

300 225

400 175

500 100

600 0

Butter in millions of pounds

Guns inmillions

1. Is it possible using the given production possibilities curve to produce 300 million guns and 250 million units of butter? Why or why not?

2. Is it possible using the given production possibilities curve to produce 200 million guns and 150 million units of butter? Why or Why not?

3. What is happening in relationship to resources if the production combination is 75 million guns and 50 million units of butter?

On a paper to be handed in graph the production possibilities curve from your notes add the points given in the following questions. Label them F,G,H then answer the questions.

microeconomics-

Macroeconomics

Positive economics- verifiable facts, not value judgments, strongly supported by data.

Normative economics- value judgments, recommendations for action

ADAM

SMITH

.Free Enterprise

Adam Smith- prevailing economic system

THREE IMPORTANT THEORIES IN THE WEALTH OF NATIONS

INVISIBLE HAND THEORY

MASS PRODUCTION SPECIALIZATION

ROLE OF THE GOVERNMENT IN THE ECONOMYDEFENSE

PUBLIC EDUCATIONCOUTY SYSTEM

INFRASTUCTURE

The Influence of Adam Smith

Adam Smith’s writings influenced writers and political leaders in America at the time of the American Revolution.

Jefferson in the Declaration of Independence mentioned many economic injustices inflicted on the colonists by Great Britain.

Example( restriction of trade, tax on tea and the Stamp Act)

James Madison in the Constitution sighted economic freedoms

Fourth and Fifth Amendments, Article one section 9

Alexander Hamilton- The Federalists

Karl Marx- Anti Capitalism