Economics EF 1 Scarcity Opportunity Cost and Tradeoffs

Economics EF 1 “Scarcity, Opportunity Cost, and Trade-offs” Week 1, Day 2 EF 1 C-D -Opportunity Cost / Trade Off -Resource Allocation

Week 1 Day 2 “Types of Capital, Opportunity Cost / Trade Offs Resource Allocation Strategies” SWBAT: 1. List and differentiate between types of Capital 2. List a variety of strategies for allocating scarce resources. 3. Define opportunity cost. Understand the difference between O. C. and Trade -offs

Economics On Time Quiz 8/8/10 EF 1 a, b- Scarcity and Opportunity Cost

1. Scarcity can be defined as the condition that exist when a. b. c. d. Limited resources exceed unlimited wants and needs Unlimited resources exceed limited wants and needs Unlimited wants and needs exceed limited resources Limited wants and needs exceed unlimited resources

2. What basic economic problem do both higher-income nations and lower-income nations have in common? a. b. c. d. too many unskilled laborers lack of capital goods too much government scarcity of resources

3. Mrs. Yo is excited about opening her new Chinese food restaurant, “The Emerald Dragon”. One of the highest priorities on her list before opening day was making sure her greeters, servers, and cooks would be there on time for the grand opening. Which of the following factors of production represents Mrs. Yo and the cooks? a. b. c. d. Land, and Entrepreneur Labor, and Entrepreneur Capital, and Land Entrepreneur, and Labor

4. Mr. Green is opening a new bakery. He has purchased an industrial oven which can accommodate twenty loaves of bread at a time. This oven represents which factor of production? a. b. c. d. Capital Entrepreneurship Labor Land

Week 1 Day 2 “Types of Capital, Opportunity Cost / Trade Offs Resource Allocation Strategies” Factors of Production (cont’d) Types of Capital Human Physical (aka capital goods) i. e. buildings or tools (knowledge and skills a worker Gains through education & experience Chapter 1 s. 1 Scarcity and the Factors of Production

Week 1 Day 2 “Types of Capital, Opportunity Cost / Trade Offs Resource Allocation Strategies” • Every decision involves Trade-Offs Alternatives we give up whenever we choose one course of action over another • Opportunity Cost is the next best alternative you gave up as a result of your choice (Name your favorite ice-cream flavors. ) (Of the four, which are your top two choices? ) (What is your least favorite ice-cream flavor? ) Chapter 1 s. 2 Opportunity Cost

Alternatives Choice Top 2 Choices Strawberry Butter Pecan Quick Review 1. What was my choice? 2. Which cone was my Opportunity Cost? 3. Which cones were my tradeoffs? 4. Define Opportunity Cost

Resource Allocation? How do I allocate resources? ? ? What are my choices? ? Allocate: to distribute according to some plan or system. Choices: A. Choose to “Control” distribution (Command Economies) 1. B. Choose to “not Control” resource distribution (Market Economies)

Let’s Review: What are the two types of Capital? How are they different? Can you define Opportunity Cost? What is the difference between O. C. and Trade-Offs? What does “allocation” mean? What are your two choices for allocation?