Intro to Economics Intro to Economics Economics n

Economics n n n Economics- study of how we make decisions with limited resources

Scarcity n n Scarcity forces us to make decisions Trade Off- what you did

Factors of Production n 1. 2. 5 Factors of Production Natural Resources- raw materials

Factors of Production 3. Capital- money and tools used to produce goods and services

Productivity and Efficiency n Division of Labor- breaking down of one large job into

Productivity and Efficiency n Specialization- people concentrate on goods or services that they produce

Markets n Market- free and willing exchange of goods and services between buyers and

Circular Flow Model n n Circular Flow- money along with goods and services freely

Lorax Video n n n No talking No cell phones Answer your questions as

Remainder of Class n Begin working on your project or completing make up work

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Intro to Economics

Economics n n n Economics- study of how we make decisions with limited resources Scarcity- not enough resources to produce all the things we want Three basic economic questions: • What to produce? • How to produce? • For whom to produce?

Scarcity n n Scarcity forces us to make decisions Trade Off- what you did not choose when making a decision Opportunity Cost- value of what you did not choose when making a decision Ex. You blew your paycheck on video games so now you can’t afford concert tickets • Trade Off? Opportunity Cost? n n Trade Off- concert Opportunity Cost- fun with friends, hearing your favorite band

Factors of Production n 1. 2. 5 Factors of Production Natural Resources- raw materials supplied by nature used in production Ex. Wood, iron, oil Labor- physical and mental capabilities of humans Ex. Workers

Factors of Production 3. Capital- money and tools used to produce goods and services Ex. Machines, buildings 4. Entrepreneurship- person who starts the business Ex. Bill Gates 5. Technology- new information to increase productivity • Ex. Computers control making things instead of making by hand

Productivity and Efficiency n Division of Labor- breaking down of one large job into many smaller jobs • Each worker becomes an expert in one isolated area of production • Ex. Assembly lines, making a car with an assembly line instead of one person making the car themselves n n Increases Productivity and efficiency Efficiency= as quick and cheap as possible

Division of Labor

Productivity and Efficiency n Specialization- people concentrate on goods or services that they produce better than anyone else

Markets n Market- free and willing exchange of goods and services between buyers and sellers (anywhere) • Ex. mall, grocery store, internet, etc.

Circular Flow Model n n Circular Flow- money along with goods and services freely flow between each other Resources leave a business and go to a consumer, then leave a consumer and go to a business • Ex. Getting paid by a business then spending the money with another business

Lorax Video n n n No talking No cell phones Answer your questions as you watch

Remainder of Class n Begin working on your project or completing make up work for this class