Daily Warm up Activity (HOT Section Notes):We have a Free Market Economy in the United States.

What are some advantages of this kind of economy? We. However, do not have an unregulated free market

system. What restraints/regulations are put in place to regulate trade?

Unit One: Learning Objectives:

North Clackamas School District Social Studies Priority Standards:

• Econ 53. Describe characteristics of command, market, traditional, and mixed economies and how they affect jobs and standards of living.

• Econ 59. Demonstrate the skills and dispositions needed to be a critical consumer of information.

Lesson Two: Daily Learning Target

I Can define and explain in writing the

following key Economic concepts:

Production Possibilities Graph

Efficiency

Underutilization

Producers have options. Should afarmer grow corn or broccoli?

A Production Possibilities Graph

• A Production Possibilities Graph shows alternative ways of using a country’s or producer’s resources.

• If a farmer uses more of his land to grow corn, he has less land for broccoli.

• Every decision has its cost.

What is the cost of producing more automobiles?

Efficiency

• An economy is efficient when it uses resources in such a way as to maximize production.

• Why is it important to be efficient?

Look at the graph. Where is efficiencyoccurring?

Look at this graph. Where is efficiencyoccurring?

Underutilization

• Underutilization is the opposite of efficiency.

• Underutilization occurs when an economy uses fewer resources than it is capable of using.

• Why do producers avoid the underutilization of resources?

Look at the graph. Where isunderutilization occurring?

The Production Possibilities Frontier

• The line on the graph that shows the maximum possible production is called the production possibilities frontier.

• At the frontier, efficiency is occurring.

• However, new technology can shift the frontier. Think about it!

Look at the graph. Where is theproduction possibilities frontier?

Don’t Forget Scarcity!

• A producer cannot produce everything.

• A producer must make choices.

• Remember: It’s all about scarcity. Our resources are limited but our wants and desires are unlimited.

It’s all about corn or broccoli.We can’t have it all.

Questions for Reflection:

• What does a production possibilities graph show?

• Define efficiency.• Why is it important to be efficient?• Define underutilization.• What problems are created by

underutilization?• What is the production possibilities

frontier?

Use the following information to create a PPC for McDonalds during Lunch hour. Biff and Skip, working at maximum efficiency can produce

the following two products:

Big Macs

0

5

10

15

1.Plot a point showing Underutilization.

2. Plot a point showing future production

possibilities.

Large Fries

25

15

5

0

Problem Solving Activity #3: Create two PPCs

A. For Under Armor:

Football cleats 25/0

Socks 100/0

B. For Starbucks

Grande Mocha w/whip 10/0

Black Coffee(house blend) 18/0

Partner Practice-Econ Book

Complete the Chapter One Assessment with partner.

Answer questions 1-9 on page 20.

Turn your answers into me.

One paper per group of two.