BELL WORK

If you have a token, add your paycheck to your Freyonomy account

Pay your Monday/ Tuesday bills

THE LAST FEW ECONOMIC CONCEPTS

Standard 1

PRIVATE PROPERTY RIGHTSProperty rights- rights of individuals and

groups to own resources and businesses.

Why are they essential to a market economy???

They give producers ______ to create G/SIncentive

They give buyers ________ to purchase G/STrust

MIXED ECONOMY Mixed Economy- reflects characteristics

of both market and command economies

Ex. USM- Businesses can employ whoever they

wishM- Producers can produce whatever they

wishC- Libraries, Education, Postal Service is run

by the governmentC- Programs such as social security provide

for those who are too old to work

GLOBAL ECONOMY Global Economy- Economic interaction

that cross international borders

Ex. US trade with China

PRIVATIZE Privatize- To change an industry or

business from government control to private ownership

Ex. Getting rid of the US Postal Service and only having Fedex and UPS

NATIONALIZE Nationalize- to convert from private to

government ownership

Ex. 2001: In response to the September 11 attacks, the then-private airport security industry was nationalized and put under the authority of the Transportation Security Administration.

MACROECONOMICSMicroeconomics is the study of smaller

units of the economy?

What is macro?

Study of larger units of the economy. Study of the economy as a whole.

CHALLENGE QUESTIONSWould you care more about

microeconomics or macroeconomics if you were…

trying to decide who to vote for in the presidential election?

trying to decide whether to work for Verizon Wireless or a new phone company called Phonex?

BELLWORKPay your Freyonomy bills for both

Wed/Thurs and Friday.

Do not check your math. Instead, wait quietly as you anticipate some fun Freyonomy buying opportunities!

LUXURY TRIP TO ST. LUCIA $1,500 6 DAYS

CRUISE TO COZUMEL, MEXICO$900 4 DAYS

NEW YORK$1200 3 NIGHTS, 4 DAYS

TOUR OF ITALY AND GREECE$3000 12 DAYS

CAMPING IN MICHIGAN$300 3 DAYS

REVIEWIdentify the factor of production

Natural resources on or undergroundLand

REVIEWIdentify the Factor of Production

Human time, effort and talent used to produce goods and services

Labor

REVIEWIdentify the Factor of Production

The resources and tools people make to produce goods and services

capital

REVIEWFactors of Production

The willingness to take risks to create and run a new business Entrepreneurship

CIRCULAR FLOW MODEL

Circular Flow Model- shows the flow of money as well as the flow of products and resources in the product market that takes place between buyers and sellers in a market economy.

The flow of money between businesses (producers) and households (consumers) is circular!!!!!!

REVIEWWhat is this?

The study of how people use scarce resources to meet unlimited wantsEconomics

REVIEW

The next best alternative you gave up tradeoff

REVIEW

The value of the next best alternativeOpportunity cost

REVIEW Define utility

How useful something is

From our beans activity, we learned that voluntary exchange happens when who expects to gain?

Everyonee

Which economic system does the term belong?

ProfitCommunismKarl MarxConsumer sovereignty Built on customGovernment controlledCompetitionFocused mainly on survival

Getting a piece of candy for answering the most correct answers in our game is an example of a ________ __________

Positive incentive

What is microeconomics?The study of the behavior of individual

players in an economy

What is macroeconomics? The study of the economy as a whole

Why are property rights essential to a market economy?

They give producers _____ and buyers _______ to exchange goods and services

Incentive and trust

This is an economic model that shows production trade-offs

Production possibilities curve

Which point shows efficiency?

Point A

Which point shows inefficiency?

Point B

Which point shows impossibility?

Point C

Who are the main decision makers in a market economy?Households and businesses

REVIEW These are advantages of which type of

economic system? Consumers can buy what they wish and

producers can produce what they wish People can take jobs based on their interests and

talents, not on government decision

Market Economy

These are disadvantages of which type of economic system?There is no mechanism to provide for those

who are too old or sick to workThere are no public goods and services such

as public education or national defense

Market