Welcome to SummerWelcome to SummerEconomicsEconomics

Welcome to SummerWelcome to SummerEconomicsEconomics

Ms. J. HernandezMs. J. HernandezJhernandez@sja.us

Materials You Will Needto Bring to Class

EVERYDAY• Notebook with Pockets for Handouts• Black or blue pen• Red Pen• Highlighter• Calculator • Textbook

Other Materials You will Need for Outside of Class

• Textbook: Economics Principles and Practices

• Access to Internet• Access to Computer and Printer• Facebook Group Page SJA

Economics

Chapter 1What is Economics?

Economics is the social science dealing with the study of how people satisfy seemingly unlimited and competing wants with the use of limited resources.

Scarcity & Choice Video

1-1: Scarcity and the Science of EconomicsPlease read pages 6 – 7.

Define these key vocabulary terms:1. Scarcity – exists when there is not enough of something

(product, service, resource) to satisfy everyone’s wants at a zero price

2. Need –basic requirement for survival such as food clothing and shelter

3. Want – something we want to have but is not necessary for survival

4. TINSTAAFL – There is no such thing as a free lunch.

Answer the following questions:1. What is the fundamental economic problem facing

all societies? scarcity2. What is the difference between a need and a want?

Video

Scarcity is the fundamental economic problem that forces consumers and producers to use resources wisely.

UnlimitedWants

Limited Resources

Scarcity

Choices

WHATto produce HOW

to produce

FOR WHOMto produce

Factors of Production or Resources

Please read pages 8 – 10 and complete the table.

Define:1. Gross Domestic Product (GDP)

The 4 key elements to the study of Economics are description, analysis, explanation and prediction. List and give a brief description of each one.

Positive vs. Normative Analysis

Factor of Production Description

1. Land Any natural resource; livestock, plants, water, oil, land

2. Labor Any human service, physical or intellectual

3. Capital Machinery and equipment used to produce. Also the factory.

4. Entrepreneul Ability Someone recognizing an opportunity, organizing the resources, and accepting the risk.

1-2: Basic Economic Concepts

Goods, Services and Consumers– A good is something tangible. It is an

economic product that is useful, relatively scarce, and transferable to others.• Capital good - manufactured good used to

produce other goods or services.• Consumer goods – goods intended for final

use by individuals.• Durable good – good that lasts for at least 3

years when used regularly.• Nondurable good – good that wears out or

lasts less than 3 years when used regularly.

– A service is an economic product that is work or labor performed for someone. It is not tangible.

– A consumer is a person who uses goods and services.

Value, Utility, and Wealth– Value is the monetary worth of a good or a

service as determined by the market.– Utility is the ability or capacity of a good or

service to be useful and give satisfaction to someone.

– Wealth is the sum of tangible economics goods that are scarce, useful, and transferable from one person to another.

– The paradox of value is the apparent contradiction between the high monetary value of a nonessential item and the low value of a necessity.

– For an item to have monetary value, it must have utility and be scarce.

The Circular Flow of Economic Activity– A market is a meeting place or

mechanism that allow buyers and sellers to come together.

– A factor market is a market where factors of production are bought and sold. A product market is where goods and services are bought and sold.

– Chart

Productivity and Economic Growth

Please read pages 16 – 17.

Define these key vocabulary terms:1. Economic Growth - nation’s total output of goods and

services increases

2. Productivity –amount of goods and services produced with a given amount of resources

3. Human Capital

4. Division of Labor -

5. Specialization

6. Economic Interdependence

1-3: Economic Choices and Decision Making• Graph Review• Individual PPC

Trade-Offs and Opportunity Costs• Every decision we make has trade-offs, or

alternative choices.• Opportunity cost is the cost of the next best

alternative use of money, time, or resources when making a decision. Opportunity Cost

• Video

Society's PPCPPC and Resource Changes

• cost-benefit analysis - compares the costs of an action to the benefits received

• free enterprise economy – consumers and privately owned businesses make the majority of the WHAT, HOW and FOR WHOM decisions

• standard of living – quality of life