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LESSON 1.1: THE PROBLEM OF SCARCITY

Learn about the fundamental concepts of economics, including scarcity, the problem of choice, and the factors of production. Explore the different types of economies and understand the role of entrepreneurs in creating goods and services.

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LESSON 1.1: THE PROBLEM OF SCARCITY

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  1. LESSON 1.1: THE PROBLEM OF SCARCITY

  2. ECONOMICS economics - the study of the choices individuals make to satisfy their wants and needs economics - the study of how society manages its scarce resources

  3. SCARCITY scarcity – refers to the unavoidable gap between limited quantities of resources for unlimited wants

  4. THE 3 Qs OF SCARCITY • What goods and services will be produced? • How will the goods and services be produced? • Who will consume the goods and services produced?

  5. GOODS & SERVICES good – a physical object that humans produce and sell service – an action that one person performs for another, for pay

  6. CLOSER 1.1 (1/14) • (exam) Define economics. • (exam) Are all goods scarce (or, limited)? All services? Explain your response. • (exam) What questions must a society answer, due to the problem of scarcity? • (bonus) Provide an example of an entrepreneur (either by name or by activity/ job).

  7. LESSON 1.2:THE ENTREPRENEUR & THE FACTORS OF PRODUCTION

  8. THE ENTREPRENEUR (Fr.) entrepreneur – a person who decides how to combine resources to create goods and services EX: restaurant owner; photographer • means “to undertake” • Spanish translation: emprendedor/a

  9. THE FACTORS OF PRODUCTION • land – any natural resource used to produce goods and services (on the earth, in the earth, in the water) • EX:​ fertile land, crude oil, sunlight

  10. THE FACTORS OF PRODUCTION • labor – the effort people devote to tasks for which they are paid • EX:​ serving tables, auto engineering, pilot flying airliner

  11. THE FACTORS OF PRODUCTION • capital – human-made resource used to produce other goods and services  • EX:​ forklift, computer, delivery van

  12. BELLRINGER 1.2 (1/16) • (exam) Explain the cause of the problem of scarcity. • (exam) Thinking of microeconomics and macroeconomics, which includes the study of a nation’s unemployment rate? Explain your response. • (exam) Define entrepreneur. Provide an example of entrepreneurship. • (bonus) Provide an example of a subject of study in microeconomics.

  13. PHYSICAL CAPITAL vs. HUMAN CAPITAL physical capital – human-made objects used to produce other goods and services human capital – knowledge and skills of a worker…

  14. CLOSER 1.3 (1/17) • (exam) Provide 3 examples of each a good and a service. • (exam) Identify the term which refers to the resources used to make all goods and services. • (exam) Define each of the three (3) factors of production and provide an example for each. • (exam) Provide an example of humancapital and an example of physicalcapital. • (bonus) Provide an example of a change in humancapital and an example of a change in physicalcapital.

  15. Production Possibilities Curves (20 pts.) • Read p. 13-14 to respond to the items, below. • Analyze Figure 1.2 and respond to items 1 and 2. • Define production possibilities curve and production possibilities frontier. • Respond to item #7, on p. 18. • Read p. 15-18 to respond to the items, below. • Respond to item #9-10, on p. 18. • Define efficiency, and underutilization. In no less than one (1) sentence, use both the terms efficient, and underutilized to make a true statement about an economy.

  16. CLOSER 1.4 (1/24) • (exam) In no less than one (1) sentence, use both the terms efficient and underutilized to make a true statement about the successful use of resources in a classroom. • (exam) List at least two (2) situations that could cause a downward shift in a PPF. List at least two (2) situations that could cause an upward shift in a PPF. • (bonus) Describe a way an organization or a nation can improve its efficiency, in regards to human capital. What can be done about human capital to increase efficiency?

  17. CLOSER 1.5 (2/1) • (exam) Describe the basis for the traditional economy. That is, what are the rules based on? • (exam) Define barter. Provide at least two (2) examples of bartering. • (bonus) Name a country which has had or currently has a pure (or, true) command economy OR name a country which has had or currently has a pure free market economy.

  18. CLOSER 1.6 (2/5) • (exam) Draw the spectrum of economies. Label and describe the types of economies at the ends and in the middle. • (exam) Does the U.S. have classes of people? Describe the distribution of wealth in the U.S. • (exam) Describe the ideal of communism. • (bonus) Identify another term for one of the types of economies in the chart.

  19. CLOSER 1.7 (2/6) • (exam) Describe Adam Smith’s overall outlook on government intervention into the economy. • (exam) Identify another term for each of command, mixed, and free market economies. • (exam) Define profit. • (exam) Distinguish (or, tell the difference between) factor market from product market. • (bonus) Describe the circular flow of a mixed market economy.

  20. TRASH BALL – ROUND 5 • Name what is shown, below. • Describe what a PPF shows. 3.Identify a point of efficient production of Good Y and Good X.

  21. TRASH BALL – ROUND 5 • Below is a production possibilities schedule. Graph a PPF, using the data (label it PPF). • Label a production point of underutilization (label it U). • Label a production point of efficiency (label it E). 4. Label a production point that is not currently possible (label it N).

  22. TRASH BALL – ROUND 5 • Draw an increase in the PPF (label it PPF2). • Explain a scenario (or, situation) that could cause this shift. • Draw an decrease in the PPF (label it PPF3). • Explain a scenario (or, situation) that could cause this shift.

  23. THURSDAY PRACTICE • (exam) Define opportunity cost. • (closely related to a Final item & PBA 1 item) Graph a PPF.  Include points that demonstrate efficiency, underutilization, and one that is not technologically possible. • Draw a decrease in the PPF; label it PPF 2. Explain a scenario that could cause this shift. • (bonus) You have a part-time job where you work 10 hours a week and earn $6

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