Today

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Todays Agenda

• Warm-up
• Check signatures
• Scarcity Activity
• Notes ?
• Factors of Production Chart
• HW NOTEBOOK CHECK THURSDAY!

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Economics What is it??

• Essential Questions
• What is Economics?
• Why is Scarcity the basic economic problem?

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Definition

• Economics is
• Study of human efforts to satisfy unlimited wants
• What does this mean in your own words?

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The Problem

• The basic economic problem that ALL societies
  face is scarcity.
• Scarcity result of not having enough resources
  to produce all the things people would want

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Needs vs. Wants

• What is a need?
• Basic requirement for our survival
• Ex Water, food, clothing, shelter
• What is a want?
• A way of expressing a need
• Ex wish for, crave, desire

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TINSTAAFL

• Is anything really free?
• TINSTAAFL There is NO such thing as a free
  lunch
• Even if YOU are not paying, somebody paid for the
  production of it

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Coupons is this really free?
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3 Questions of how to use limited resources.

• WHAT to produce?
• Society cant have everything it wants, so it
  must decide what to produce
• Example Should the U.S. worry about making more
  military weapons or more food/shelter to take
  care of the homeless?

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3 Questions of how to use limited resources.

• HOW to produce?
• What method will be used to produce things?
• Should factory owners use more machinery and less
  workers or more workers and less machinery?

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3 Questions of how to use limited resources.

• FOR WHOM to produce?
• Who will receive the existing items/supplies?
• Who is it allocated to?

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Todays Agenda 9/10

• Warm-up
• Notebook Check
• Review Factors of Production
• Goods/Services Notes
• Vocab Activity

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Goods

• Good
• An item that is economically useful (satisfies a
  want)

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Goods

• Consumer Goods
• Intended for final use by individuals
• Examples Ipods, Cell Phones
• What are some items around the class that would
  be consumer goods?

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Goods

• Capital Goods
• Manufactured goods used to produce other goods
  and services
• Example an oven in a bakery

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Services

• Service
• Work that is performed for someone
• Ex. Barber
• What are some examples of a service we see in our
  everyday lives?

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Values

• Value is a worth that can be expressed in dollars
  and cents.
• The PARADOX OF VALUE When necessities have
  little value, and non-necessities have much
  higher value.
• The current price of gold is 993 per ounce
• The current price of water is 4.50 for 12
  bottles

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How is Value calculated?

• Value Scarcity Utility
• Scarcity means..
• Utility - the ability to be useful or provide
  satisfaction
• How does gold, diamonds, and other jewels fit
  into the paradox of value?

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Wealth

• Wealth is
• The accumulation of products that are tangible,
  scarce, useful, and transferable.
• Wealth is the accumulation of many things that
  have VALUE
• Who do you consider to be wealthy?

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Todays Agenda

• Circular Flow of Economic Activity Chart
• Activity
• Critical Thinking Questions
• Project Assignment

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Essential Questions

• How do consumers and businesses interact with
  each other in the economic flow of activity?

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Circular Flow of Economic Activity
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• Businesses the companies providing goods and
  services
• Individuals the consumers (people, us) that
  want to buy/use the goods and services

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Markets

• Product Market (top box) where businesses sell
  their goods and services to consumers
• Individuals spend their money in product markets
  and get goods and services
• Businesses get INCOME from consumers buying goods
  and services

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Markets

• Factor Market (bottom box)- where productive
  resources are bought and sold
• businesses hire labor for wages/salaries, get
  land, etc.
• PAYMENTS for resources (Factors of Production)
• Individuals get INCOME from working in factor
  markets

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Critical Thinking Question

• Answer the following question and hand in when
  completed
• As a consumer, what role do you play in the
  circular flow of economic activity?