Introduction to Economics

• Essential Skill: Demonstrate an understanding of Economic Concepts by giving examples

• Discussion Question (Write-Pair-Share):

• Why are some people and nations wealthy and others poor?

• Question: How did your answers relate to the definitions of Economics and Scarcity?

• Economics: the study of how people choose to use limited resources to fulfill unlimited wants

• Scarcity: the condition of not having enough resources to satisfy all of one’s wants

• Did any of your answers relate to factors of production (resources)? (land, labor, capital)

• Natural Resources (“Land”):• materials from nature • some countries have oil, coal, precious metals,

fertile soil, etc.• Labor: Workers • In some countries workers are more productive

than in others. Why?• Capital: manmade tools, machines or buildings

which are used to create goods or services or make work more productive

• Industrialized nations have better communications technology than developing countries (also machines and transportation)

Adam Smith

• “father of modern economics”

• Scottish philosopher & economist• Published The Wealth of Nations (1776)• He argued the best way for society to advance is

for people to work for their own self-interest (their own well-being)

• Do you agree or disagree? Give examples to support your opinion.

• He also argued that competition is the key to a healthy economy. Do you agree or disagree? Give examples.

Definitions

• Micro Economics:– The study of the economic decisions and actions of

individuals and companies• Macro Economics:

– The study of the economic systems of countries• Economic System: a nation’s way of producing things

its citizens want• Types of Economic Systems:• Command Economy Mixed Market Market

Economy• Video link (highlight some ideas in your reading notes)

Discussion Question

• Write-Pair-Share:

• Why do prices often end in 99 cents?

• Definition Incentive: something that motivates or encourages someone to do something

• Give examples of some incentives

Fill in the Chart• People Choose: people must decide how to use their

resources• Example?:• Choices involve Costs: people weigh the costs of

choosing one thing over another• Example?:• Incentive: An incentive is something that motivates or

encourages someone to do something• Example?:• Economic Systems: a nation’s choices influence

individuals’ choices• Example?:

Fill in the Chart

• Voluntary Trade: Money can be made by meeting consumers’ demands and allowing companies to decide what/how to produce

• Example?:• Future Consequences: Choices will affect others’

decisions. Did the benefits outweigh the costs?• Example?:• DIRECTIONS: COMPLETE the CHART with

answers from the Popcorn Enigma