Unit 1: Foundations in Economics $100 $100 $200 $200 $300 $300 $400 $400 $500 $500 $100 $100 $200 $200 $300 $300 $400 $400 $500 $500 $100 $100 $200

Unit 1:Unit 1:Foundations in Foundations in

EconomicsEconomics

Unit 1:Unit 1:Foundations in Foundations in

EconomicsEconomics

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Getting Getting StartedStarted

Economic Economic SystemsSystems

Chart Chart ToppersToppers

Its Human Its Human NatureNature

SurplusSurplusgrabgrab

final

$100 $100 Getting StartedGetting Started

The resources used to make goods and The resources used to make goods and services are called this services are called this

$100 $100 Getting StartedGetting Started What are factors of productionWhat are factors of production Land Land Labor Labor CapitalCapital

$200 $200 Getting StartedGetting Started Oil, engineers, and drillsOil, engineers, and drills Income, workers, & moneyIncome, workers, & money

OrOr Farmers, importers and exportersFarmers, importers and exporters

Which of the above sets Which of the above sets include the 3 factors of include the 3 factors of production?production?

$200 $200 Getting StartedGetting Started What is oil (land)What is oil (land) Engineers (labor)Engineers (labor) and Drills (capital)and Drills (capital)


Resources in any society are Resources in any society are scarce so a society must make this scarce so a society must make this decision first…decision first…


What is make choices how to use What is make choices how to use their resourcestheir resources


1.1. The amount of money they haveThe amount of money they have

2.2. The quality and quantity of land, The quality and quantity of land, labor, and capital resourceslabor, and capital resources

oror

3.3. Exchange rates of currency Exchange rates of currency

Which of the above limits an economy’s Which of the above limits an economy’s potential output?potential output?


What is the quality and quantity of What is the quality and quantity of land, labor, and capital resourcesland, labor, and capital resources


This is the most important This is the most important Economic goal for all societiesEconomic goal for all societies

$500 $500 Getting StartedGetting Started What is make the best use of What is make the best use of

scarce resourcesscarce resources

$100 $100 Economic SystemsEconomic Systems An advantage of this type of market An advantage of this type of market

system is that it offers the greatest system is that it offers the greatest variety of goods and services to the variety of goods and services to the consumer consumer

$100 $100 Economic SystemsEconomic SystemsWhat is a FREE market What is a FREE market systemsystem

$200 $200 Economic SystemsEconomic Systems

The Unites states economy is The Unites states economy is best described as thisbest described as this


What is a Mixed MarketWhat is a Mixed Market

$300 $300 Economic SystemsEconomic Systems Which of the following approaches Which of the following approaches

to pollution control makes the best to pollution control makes the best use of a country’s economic use of a country’s economic resources?resources?

Prohibiting activities that cause Prohibiting activities that cause pollutionpollution

Using resources to reduce all Using resources to reduce all pollution damagepollution damage

Controlling pollution as long as Controlling pollution as long as benefits are greater than the benefits are greater than the costcost

$300 $300 Economic SystemsEconomic SystemsControlling pollution as long as Controlling pollution as long as

benefits are greater than the costbenefits are greater than the cost

$400 $400 Economic Systems Economic Systems In a market economy, people act in In a market economy, people act in

self interest depending on the self interest depending on the individuals particular wants…this individuals particular wants…this helps public interest because it does helps public interest because it does this to the markets this to the markets


What is make them competitive What is make them competitive with a variety of productwith a variety of product

$500 $500 Economic Systems Economic Systems

In this kind of market system the In this kind of market system the Government decides how to allocate Government decides how to allocate resorcesresorces

$500 $500 Economic Systems Economic Systems What is a Command system What is a Command system (Centrally planned)(Centrally planned)

$100 $100 Chart ToppersChart Toppers What is the opportunity cost of sleeping inWhat is the opportunity cost of sleeping in

Karen’s Decision-making Grid

Alternatives

Sleep late Wake up early to study

Benefits • Enjoy more sleep

• Have more energy during the day

• Better grade on test

• Teacher and parental approval

• Personal satisfaction

Decision Sleep late Wake up early to study for test

Opportunity cost Extra study time Extra sleep time

Benefits forgone• Better grade on test

• Teacher and parental approval

• Personal satisfaction

• Enjoy more sleep

• Have more energy during the day

$100 $100 Chart ToppersChart Toppers

What extra study time for the testWhat extra study time for the test


In this chart the green line indicates thisIn this chart the green line indicates this

Watermelons (millions of tons)

Shoes(millions of pairs)

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Production Possibilities Graph


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a (0,15)

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21

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5

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c (14,12)

d (18,9)

e (20,5)

f (21,0)

8 14b (8,14)

$200 $200 Chart ToppersChart Toppers What is the Production Possibilities What is the Production Possibilities

Frontier Frontier


Shoes(millions of pairs)

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a (0,15)

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A productionpossibilities frontier

c (14,12)

d (18,9)

e (20,5)

f (21,0)


What does What does point ‘g” point ‘g” indicate about indicate about production production possibility?possibility?

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c (14,12)

d (18,9)

e (20,5)

f (21,0)

a (0,15)b (8,14)

S

g (5,8)

Pont “g”


What is a point of What is a point of underutilizationunderutilization

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c (14,12)

d (18,9)

e (20,5)

f (21,0)

a (0,15)b (8,14)

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g (5,8)

A point of underutilization

$400 $400 Chart ToppersChart Toppers Line “t” shows Line “t” shows

this in relation this in relation to line “s”to line “s”

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T

Future productionPossibilities frontier

c (14,12)

d (18,9)

e (20,5)

f (21,0)

a (0,15)b (8,14)

S


What is What is GROWTHGROWTH

DAILY DAILY DOUBLEDOUBLE


Knowledge and skills a worker gains through Knowledge and skills a worker gains through education and experienceeducation and experience


Human Capital Human Capital

$100 $100 It’s Human NatureIt’s Human Nature

This is how consumers make their This is how consumers make their desires known to the government…desires known to the government…

And this is how they make their And this is how they make their desires known to businessesdesires known to businesses

(2 part answer)(2 part answer)

$100 $100 It’s Human Nature It’s Human Nature What is by voting and buyingWhat is by voting and buying

$200 $200 It’s Human Nature It’s Human Nature

The economic system where people The economic system where people trade for the goods they need or want trade for the goods they need or want

is called thisis called this


What is a Free Market systemWhat is a Free Market system

$300 $300 It’s Human NatureIt’s Human Nature Entrepreneurs take the risk of Entrepreneurs take the risk of

ownership in the pursuit of thisownership in the pursuit of this

$300 $300 It’s Human NatureIt’s Human Nature What is Profits ($$$)What is Profits ($$$)


Where are consumers most likely going to Where are consumers most likely going to spend their money?spend their money?


What is to satisfy specific needs and What is to satisfy specific needs and wantswants

$500 $500 It’s Human NatureIt’s Human NatureYou Buy a 50 inch Plasma HDTVYou Buy a 50 inch Plasma HDTV

Which of the following is your Which of the following is your OPPORTUNITY OPPORTUNITY COSTCOST

The ability to have more people view The ability to have more people view footballfootball

Dollar cost of the TVDollar cost of the TV Other goods and services given up to buy Other goods and services given up to buy

the TVthe TV


What is other goods and What is other goods and services given up to buy the services given up to buy the

TVTV

$100 $100 Surplus grabSurplus grab

In the United States these 3 groups decide In the United States these 3 groups decide what goods and services should be what goods and services should be producedproduced


Producers, Consumers and Government Producers, Consumers and Government


When people’s wants and needs exceed When people’s wants and needs exceed the resources available you get thisthe resources available you get this

$200 $200 Surplus grabSurplus grabWhat is scarcityWhat is scarcity


This is what you call a person who starts This is what you call a person who starts a businessa business


What is an entrepreneur What is an entrepreneur

$400 $400 Surplus grabSurplus grab Benefits to older citizens, Benefits to older citizens,

surviving family members, and surviving family members, and people with certain disabilities people with certain disabilities are provided by this are provided by this government agencygovernment agency

$400 $400 Surplus grab Surplus grab

What is Social SecurityWhat is Social Security

DAILY DAILY DOUBLEDOUBLE


On a Production Possibilities curve, an On a Production Possibilities curve, an economy working below its efficient economy working below its efficient production level is shown by thisproduction level is shown by this


A point A point underunder the Production the Production Possibilities FrontierPossibilities Frontier

GovernmentGovernment

Name 3 specific services Name 3 specific services the Government provides the Government provides

its citizensits citizensANDAND

The opportunity costs of The opportunity costs of providing those servicesproviding those services

Guns or butter…Guns or butter…

Documents

Unit 1: Foundations in Economics $100 $100 $200 $200 $300 $300 $400 $400 $500 $500 $100 $100 $200 $200 $300 $300 $400 $400 $500 $500 $100 $100 $200