Lets review Yesterdays Activity.

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Suzan Bryant
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1 Economics

2 Lets review Yesterdays Activity.

3 Some Questions What did you have to do to complete the presentation? What part of this activity do you think is something you need to do in creating a real business? What parts of the activity do you think will be important to know for the rest of the class? How well do you think you did?

4 Review of Terms Economics: is the social science that seeks to describe the factors which determine the production, distribution and consumption of goods and services. Economic Enigma: Problems that can be solved through economic analysis Resource: Anything used to produce an economic good or a service

5 Review of Terms Scarcity: is the fundamental economic problem of having seemingly unlimited human wants in a world of limited resources Microeconomics: the part of economics concerned with single factors and the effects of individual decisions and businesses. Macroeconomics:the part of economics concerned with large-scale or general economic factors, such as interest rates and national productivity

6 Review of Terms Positive Economics: is the branch of economics that concerns the description and explanation of economic phenomena. It focuses on facts and cause-and-effect behavioral relationships and includes the development and testing of economics theories. Normative Economics: is a part of economics that expresses value or normative judgments about economic fairness or what the outcome of the economy or goals of public policy ought to be.

7 What is Economics?

8 What is Economics Study of various Economies (We will look at three types) Economy a system that determines how goods are made, distributed and consumed. What will we study in Economics? Types of Economies in the world How the United States Capitalist economy works How markets in general work The Stock Market Other aspects having to do with business, money, trade, markets and laws

9 Macroeconomics Economy on a large scale Jobs, wages Government Spending Banking Stock Markets

10 Can you come up with examples of Micro Vs. Macro Economic questions? Write At least 1 in your notes

11 Scarcity (spelling hint! Scar City) Scarcity is the condition that results form society not having enough resources to produce all the things people would like to have Economics is the study of how people try and satisfy unlimited and competing wants through the use of scare resources

12 Needs and Wants Need: A basic requirement for survival Want: A way of expressing a need Food, clothing, shelter I.e.: Pizza for need of food Range of things represented by the term want is much broader than that represented by the term need.

13 Scarcity means nothing is free Resources are limited everything we do has a cost No Such Thing As A Free Lunch!

14 Three Basic Questions What to produce How should society use its resources? How to Produce Technology or people? For Whom to Produce Who will receive existing supply? 1. WHAT 2. HOW 3. FOR WHOM

15 Scarcity: The fundamental economic problem that forces consumers and producers to use resources wisely Unlimited Wants Limited Resources Scarcity Choices What to produce How to produce For Whom to produce

16 The Factors of Production Resources required to produce the things we would like to have Land Labor Capital Entrepreneurs

17 Land Gifts of Nature Natural resources not created by humans Deserts, fertile fields, mineral deposits, livestock, forests, sunshine and climate necessary to grow crops

18 Labor People - their efforts, abilities and skills Resource that may vary in size over time: population growth, immigration, famine, war and disease can impact quantity and quality of labor

19 Capital Tools, equipment, machinery and factories used in the production of goods and services Called Capital Goods (not the same as Financial Capital, which is Money)

new businesses or bring new products to the market Provide initiative

20 Entrepreneurs Risk-taker in search of profits who does something new with existing resources Driving force in an economy Ability to start new businesses or bring new products to the market Provide initiative that combines resources of land, labor, and capital into new products

21 Technology Whatever technology that is used in the creation of the product. The technology could be the computers,

22 Production Process of creating goods and services All factors of production have to be present Break down the factors of production for this classroom in your team

s borders in a 12 month period Most comprehensive measure of

23 Gross Domestic Product (GDP) The dollar value of all final goods and services, and structures produced within a country s borders in a 12 month period Most comprehensive measure of a country s total output and is a key measure of country s health

24 How to calculate GDP GDP = C + I + G + (Ex Im) C = total spending by consumers I = total investment (spending on goods and services) by businesses G = total spending by government (federal, state and local) (Ex Im) = net exports (exports imports)

Chapter 1: What is Economics? Section 1

Chapter 1: What is Economics? Section 1 Objectives 1. Explain why scarcity and choice are the basis of economics. E1 2. Describe what entrepreneurs do. E1,2 3. Define the three factors of production and