Take out a pencil or pen, and then be prepared to take notes in a notebook

or 3-ring binder.You will be quizzed on this information, so pay attention to main ideas

and details.

Economics

Economics• The study of how individuals, businesses and

nations make choices based on scarcity in the economy.

• Fact: Human beings, businesses, and countries have unlimited wants.

• Fact: The world has limited resources.• Economics affects everyone and, therefore, should

matter to everyone. For example, economics is involved when a student decides to spend their time and money (limited resources) going to college.

Who is Mr. Buster?• Mr. Buster is a substitute teacher in the Roosevelt

School District and the Phoenix Union High School District. Previous schools include Camelback High School, North High School, Ed Pastor Elementary, and P.L. Julian Elementary.

• Mr. Buster spent a very short time in the Army before being medically discharged (more on that some other day).

• Mr. Buster student taught for Mr. Smith’s World History class in Fall 2011.

Who is Mr. Buster?• Mr. Buster began college at AWC

• He graduated from Arizona State University

• He is the oldest of five kids and grew up in Yuma, Arizona

Who is Mr. Buster?• He hates wasting people’s time and hates seeing

people waste their lives• He believes this could be the most relevant class

you ever take … but that’s up to you• He expects you to treat everyone with respect

because he will be treating each of you with dignity

• He expects you to be ready to take notes, pay attention to detail, to take responsibility for yourself, and to truly contribute to making this class worthwhile

What’s Wrong With That

Picture??

•Opportunity Cost- A benefit, profit, or value of something that must be given up to acquire or achieve something else. Since every resource (land, money, time, etc.) can be put to alternative uses, every action, choice, or decision has an associated opportunity cost.

•It's nice of Superman to rescue a kitten, but has he considered the opportunity cost of doing so? Rescuing kittens is so easy that children often do it. With all the accidents, crimes, and natural disasters that occur in the world, he could definitely spend his time more productively.

•Comparative Advantage- The ability to produced one good at a relatively lower opportunity cost than other goods.

•The concept of comparative advantage suggests that Superman should focus on tasks that others can't do well, like stopping runaway trains or transporting nuclear weapons into deep space so they can detonate safely.

Elasticity- the measurement of how changing an economic variable affects others. For example:"If I lower the price of my product, how much more will I sell?""If I raise the price, how much less will I sell?""If we learn that a resource is becoming scarce, will people scramble to acquire it?"

You'd think that movie theaters would charge students and children more than adults, since kids are more likely to spill popcorn and make noise. But theater owners know they can earn more revenue by charging students and children less. The reason is that kids are

more price sensitive (in economic terms, they have a higher price elasticity of demand), and therefore less likely to come to the movies if the prices are high. Adults have a lower

price elasticity of demand, so they will tolerate more increases in price.

Economies of Scale- The increase in efficiency of production as the number of goods being produced increases. Typically, a company that achieves economies of scale lowers the average cost per unit through increased production since fixed costs are shared over an increased number of goods.

It's hard to imagine that Mark and Sally will make a profit with their business. Suppose a customer asks them to deliver a small package to a city 200 miles away. Unless they have many other packages going to the same city, they'd have to charge a lot just to cover their variable costs--labor, gas, and depreciation. They wouldn't be able to compete against companies like UPS and FedEx, which can keep their costs down by handling a huge volume of parcels.

The Law of Diminishing Marginal Utility- as a person increases consumption of a product - while keeping consumption of other products constant - there is a decline in the marginal utility (think enjoyment) that person derives from consuming each additional unit of that product.

It's not just the calories--a Big Mac with supersized fries has more. The law of diminishing marginal utility says that as a person increases consumption of a good, holding consumption of other goods constant, the marginal utility (enjoyment) he or she gets from each additional unit of that good declines. This suggests that the marginal utility of the second egg will be smaller than that of the first, and the marginal utility of the third will be smaller still. For most people, the marginal utility of the tenth egg would likely be negative.

Most of the homes on this lakefront are expensive and built close to each other, so it's likely that the lakefront lots are highly valued. This, in turn, suggests that the opportunity cost of living in the shack is high. We rarely see shacks on expensive lots because the owners usually conclude that they'd do better by selling their property and buying a nicer house on a less desirable lot.