Here are my few, simple classroom rules . Know them and abide by them.

1. Welcome To Advanced Placement Government and Politics Here are my few, simple classroom rules. Know them and abide by them. 1. Be in the classroom, seated, prepared to work (with all necessary materials ready) on time. • Keep your area clean and remove • any trash you might accumulate at • the end of class.

2. Welcome To Advanced Placement Government and Politics 3. Respect others including using appropriate language at all times. • Properly care for textbooks, desks • and other classroom equipment • and furniture (NO WRITING ON • DESKS OR IN BOOKS) 5. Abide by all OHS rules, particularly: no hats, CD players, cell phones, pagers, radios, games or other electronic devices during class.

3. Advanced Placement Psychology Consequences: See rules sheet Extraordinarily bad students receive the Simoncini curse: Girls: look like this by age 19 Boys: marry a woman who looks like this Obey the rules avoid the curse

4. Welcome To Advanced Placement Government and Politics Extensive reading and answering of several discussion questions nightly; occasional reading quizzes. Graded participation Weekly in-class writing assessments and bi-weekly vocabulary assignments Tests every two weeks—similar to the AP exam

5. Welcome To Advanced Placement Government and Politics And once we begin our study of the U. S. government in October we shall also spend each Friday’s class engaged in a discussion of current events and politics in general.

6. Welcome To Advanced Placement Government and Politics On this hot afternoon, I don’t want to make you strain too much but I do have a homework assignment for you. Read Chapter 1 of the economics book and do the questions on the website.

7. What is Economics? Objectives: Define economics Identify the factors of producton Determine the goal of entrepreneurship Determine why scarcity is a basic problem of economics Identify the issues that producers must address to distribute resources Explain why producers study productivity

8. California Academic Standards for Economics Adam Smith 12.1: Students understand common economic terms and concepts and economic reasoning

9. What is Economics? Professor Pete here. Being that all of you are seniors, let’s begin our study of economics by taking a look at the different college courses you can take under the heading of “Economics.” Here are the offerings of my alma mater, the University of San Francisco.

10. Before going on, let’s briefly discuss class methods and note taking. What is Economics? Prepare all questions on the sheet provided on the website. Augment your answers with information from the notes: red: very important—should take down; blue: mostly additional information or examples; green: things previously studied or in homework.

11. What is Economics? Microeconomics: choices made by economic actors (households, companies, individual markets). Macroeconomics: behavior of entire economies (unemployment in the U. S.) Factors of Production: Natural resources

12. What is Economics? Factors of Production: Human resources Factors of Production: Capital resources

13. What is Economics? Factors of Production: Entrepreneurship Scarcity Scarcity: the most basic problem of economics because it forces people to make decisions about how to use resources effectively. Water usage in California

14. What is Economics? Three Basic Economic Questions • What to produce? • How to produce? • For whom to produce?

15. What is Economics? Unlimited Needs & Wants Limited Resources Scarcity Choices WHAT To produce HOW To produce FOR WHOM To produce

16. What is Economics? Trade-offs and opportunity costs Trade-off: if a resource is used to produce or consume one good, that same resource cannot be used to produce or consume something else. Opportunity cost: value of next best alternative given up to purchase preferred item.

17. What is Economics? 9 8 7 6 5 4 3 2 1 0 Chevrolet production options if it concentrated its current resources on producing only Aveos and Impalas Assumption: resources will not change and those resources will be used efficiently E Chev. Aveo (in millions) D F C G B A 1 2 3 4 5 6 Opportunity costs Chev. Impala (in millions)

18. What is Economics? 9 8 7 6 5 4 3 2 1 0 What does the curve’s shift to the right indicate? Z E Chev. Aveo (in millions) Improvements in technology or new resources are available. Y A 1 2 3 4 5 6 Chev. Impala (in millions)

19. What is Economics? Functions of money • A standardized item that is generally traded for goods or services • A measure of value that allows both producers • and consumers to determine and express • worth • A store of value that can be saved and used to • purchase items at a later date

20. What is Economics? Self-sufficiency vs. Interdependence Self-sufficiency: societies can fulfill all of their needs without outside assistance Interdependence: events or developments in one region of the world or sector of the economy influence events or developments in other regions or sectors

21. It’s time for a group activity to reinforce what we have learned thus far. What is Economics? Break into your larger groups. Plan the creation of an industrial or agricultural business that produces some tangible commodity. The commodity must have two variations (i.e. luxury vs. economy cars). Discuss why you selected the commodity in terms of the 3 basic economic questions and in terms of the 4 factors of production. Create a production possibilities curve for your commodity.

22. Economic Systems Oh boy! Another day of fun and games learning economics.

23. What is Economics? Objectives: Describe the types of mixed economies that exist today Explain the basic principles of free enterprise in the United States Name the two markets of the circular flow model and explain how the circular flow model reflects change List and define the major goals of U. S. economic policy

24. California Academic Standards for Economics 12.2: Students analyze the elements of America’s market economy in a global setting

25. Economic Systems Traditional, Command and Market Economies Traditional: a society’s values, customs and traditions—rituals, habits, laws and religious beliefs. Kaiowa tribe, near Paraguay-Brazil border

26. Economic Systems Traditional, Command and Market Economies Command economies rely on government officials to answer the three basic economic questions. Individuals have little or no say in economic choices.

27. Economic Systems Traditional, Command and Market Economies Market economies: individuals answer the three basic economic questions. The government has no say in what, how and for whom goods are produced and the factors of production are owned by individuals. Mixed: pure systems do not exist in the world today.

28. Economic Systems Adam Smith (1723-1790) An Inquiry into the Nature and Causes of the Wealth of Nations When the government is not involved in the economy, the market is driven purely by self-interest—the impulse that encourages people to fulfill their needs and wants Self-interest benefits all of society by helping the economy grow (John Nash’s Equilibrium) Government involvement in the economy conflicts with self-interest and limits markets

29. Economic Systems Mixed economies Authoritarian socialism (Communism)—the government owns or controls nearly all the factors of production.

30. Economic Systems Mixed economies Capitalism—closest to the market model Individuals can own the factors of production and answer the basic economic questions The government can enact some regulations, but its involvement in the economy is relatively limited

31. Economic Systems Mixed economies Democratic socialism—the government owns some of the factors of production; but government ownership is generally limited to key industries such as public utilities and phone networks

32. Economic Systems Five Features of the U. S. Free-Enterprise Syst. • Individuals have the right to: • Own private property and • enter into contracts • Make individual choices • Engage in economic • competition • Make decisions based on • self-interest • Participate in the economy with limited • government involvement and regulation

33. Economic Systems Government Money payments (taxes) Money payments Services Resources (labor) Money payments (taxes) Money payments Products Services Money payments Households (Individuals) Businesses Products Money payments (income) Resource market Resources (labor) Product market

34. Economic Systems Six Major Goals of American Economic Policy • Freedom • Economic Efficiency • Economic Equity • Economic Security • Economic Stability • Economic Growth

35. Economic Systems Six Major Goals of American Economic Policy • Economic Efficiency • One measure is gross domestic product—the total value of all final goods and services produced within a country in a given year.

36. Economic Systems Six Major Goals of American Economic Policy • Economic Equity • Milton Freidman (Free to • Choose: A Personal Statement • (1980)): Economic freedom • promotes economic equity. “A • society that puts equality—in the sense • of equality of outcome—ahead of • freedom will end up with neither equality nor freedom…On the other hand, a society that puts freedom first will, as a happy by-product, end up with both greater freedom and greater equality…”

37. Economic Systems Six Major Goals of American Economic Policy • Economic Security • Example: Federal Deposit Insurance Corporation—since 1933 has insured individual bank accounts (today up to $250,000)

38. Economic Systems Six Major Goals of American Economic Policy • Economic Stability • Example: Price stability—the prices of all products taken together—not to changes in the price of an individual product, often indicated in the Consumer Price Index

39. Economic Systems Why are scarcity and choice basic problems in economics Scarcity forces individuals, businesses, and governments to prioritize and make choices Not all needs and desires can be met Choice is a basic economic problem because not all available choices can be selected

40. Economic Systems How are economic growth, stability and security measured? Growth: changes in standard of living Stability: employment rates and price fluctuations Security: a nation’s poverty level, the number of failed businesses and banks, and by the number of emergencies that might harm the national economy

41. Economic Systems Consider the new sports complex for baseball, softball and soccer. Up until a few years ago that entire area was a large neighborhood with several single family homes. When the school said it needed that area for a sports complex, the government agency known as the Oakdale Joint Unified School District invoked the legal concept of eminent domain and people were required to lose their homes. They were reimbursed, however, at fair market prices. Do you believe that the concept of eminent domain is a fair practice? Take a moment and read “In the News” on p. 41.

42. It’s time for a group activity to reinforce what we have learned thus far. What is Economics? Break into small groups. Create a case study—real or made up—about a business following the five features of the U. S. free enterprise system. Then apply your case study to the Circular Flow of Goods and Services chart on p. 34. Be prepared to discuss with the class.