WARM UPWARM UP

Make a list of 10 Make a list of 10 things you want!!!things you want!!!

What is the What is the difference between a difference between a “Need” vs. a “want”?“Need” vs. a “want”?

ScarcityScarcityThe Economic The Economic

ProblemProblem

SCARCITYSCARCITY

LimitedResources

SCARCITYSCARCITY

Unlimited Wants

Economics Is…Economics Is…

The study of limited The study of limited resources but resources but

unlimited wants, unlimited wants, which forces people which forces people to make a CHOICE!to make a CHOICE!

Opportunity CostOpportunity Cost

How much does it cost How much does it cost you to “attend” this you to “attend” this particular “class session”?particular “class session”?

Think about it!Before going on, try to come up with

an answer to this question. Talk with a partner.

Opportunity CostOpportunity Cost

To answer the question, you To answer the question, you should have asked yourself what should have asked yourself what else you could be doing during else you could be doing during this time?this time?

Next, prioritize all of these other Next, prioritize all of these other activities.activities.

Opportunity CostOpportunity Cost

The first item on your list The first item on your list of alternative activities is of alternative activities is the the opportunity cost opportunity cost of of attending this class.attending this class.

Every activity has a cost - Every activity has a cost - what you gave up.what you gave up.

Opportunity CostOpportunity CostBecause resources are scarce, Because resources are scarce,

choices need to be made.choices need to be made.Choice results in cost.Choice results in cost.The cost of any choice is what The cost of any choice is what

you had to give up.you had to give up.This is called This is called Opportunity CostOpportunity Cost..

Economics:Economics:TWO BRANCHESTWO BRANCHES

MicroeconomicsMicroeconomicsMMacroeconomicsacroeconomics

“Small Picture” “Big Picture”

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

Looking at one thing Concerned with the at a time TOTAL picture

Individual decision making Societal decision making

Four Factors of ProductionFour Factors of Production

LandLand-natural resources-natural resources LaborLabor-an individual providing his/her -an individual providing his/her

services for wagesservices for wages CapitalCapital-equipment that can be used -equipment that can be used

for productionfor production EntrepreneurshipEntrepreneurship-someone that -someone that

uses the first three resources to uses the first three resources to make a profit. Considered to be a make a profit. Considered to be a “risk taker” and business leader.“risk taker” and business leader.

Charlie and the Chocolate Charlie and the Chocolate Factory QuestionsFactory Questions

1. Identify 2 things that are 1. Identify 2 things that are scarcescarce in the movie. in the movie. 2. Who is the main character? Describe his 2. Who is the main character? Describe his

socioeconomic background.socioeconomic background. 3. What does Willy Wonka specialize in? 3. What does Willy Wonka specialize in?

Determine whether it’s related to micro or Determine whether it’s related to micro or macroeconomics. Why?macroeconomics. Why?

4. What type of incentive does Wonka offer to the 4. What type of incentive does Wonka offer to the kids? How many winners are there?kids? How many winners are there?

5. What is the main character’s Opportunity Cost? 5. What is the main character’s Opportunity Cost? Why does he almost give up the prize?Why does he almost give up the prize?

6. Why did the employees lose their job at the 6. Why did the employees lose their job at the factory?factory?

7. Give one example of each of these: land, labor, 7. Give one example of each of these: land, labor, capital, and entrepreneurship in the movie.capital, and entrepreneurship in the movie.

Copy the Table in your Spiral Copy the Table in your Spiral Notebook!!!Notebook!!!

LandLand LaborLabor CapitalCapital EntrepreneurshipEntrepreneurship

Determine which of the four factors of Determine which of the four factors of production it falls under:production it falls under:

ComputerComputer ForestsForests Cab driverCab driver Bakery Store OwnerBakery Store Owner PetroleumPetroleum AutomobileAutomobile Brain surgeonBrain surgeon FactoriesFactories TractorTractor Highway systemHighway system

RadioRadio MountainsMountains Small restaurant Small restaurant

ownerowner MineralsMinerals PencilPencil Computer software Computer software

developerdeveloper WaitressWaitress OceanOcean FishFish

Come Up With 3 Examples of Your Come Up With 3 Examples of Your Own and include it in your tableOwn and include it in your table

Land:Land:

Labor:Labor:

Capital:Capital:

Entrepreneur:Entrepreneur:

Collage of the Four Factors of Production Collage of the Four Factors of Production (work with a partner)(work with a partner)

Create a collage that illustrates the four Create a collage that illustrates the four factors of production.factors of production.

Divide your paper into 4 equal parts, and Divide your paper into 4 equal parts, and have each “box” represent one of the have each “box” represent one of the four factors of production. Label one four factors of production. Label one under each box.under each box.

Find pictures that fall under each Find pictures that fall under each category.category.

THE FOUR FACTORS OF PRODUCTIONTHE FOUR FACTORS OF PRODUCTION

LandLand LaborLabor

CapitalCapital EntrepreneurshipEntrepreneurship

Due to scarcity, every Society Must Due to scarcity, every Society Must

Answer 3 Questions:Answer 3 Questions:1.1. What goods shall we produce?What goods shall we produce?

2.2. How shall these goods be How shall these goods be produced?produced?

3.3. For whom should the goods be For whom should the goods be produced?produced?

In the U.S. the three Qs are In the U.S. the three Qs are answered as follows:answered as follows:

1.1. WHAT TO PRODUCE?WHAT TO PRODUCE? U.S. production leans towards U.S. production leans towards consumer goods & serviceconsumer goods & service

2.2. HOW TO PRODUCE?HOW TO PRODUCE? U.S. believes in private enterprise U.S. believes in private enterprise (corporations and small businesses (corporations and small businesses privately owned)privately owned)

3.3. FOR WHOM TO PRODUCE?FOR WHOM TO PRODUCE? U.S. production leans towards U.S. production leans towards the large middle classthe large middle class