11/21 WARM-UP QUESTIONS Put name, date, and period on 18.1/19.1 and pass forward. 1. A business owner is an example of which factor of production? 2. What factor of production includes money and man-made materials needed to produce an item? Bonus Question: To whom did the Charlotte City council announce it was going to give $87.5 million? What does the Council expect in return? GRAMMAR LESSONCOMPLETE SENTENCES! A sentence require a subject and a predicate (the action). EX. Willie Grimes was in prison because he was found guilty of raping a woman. Sentences cannot begin with “because” (unless it’s an introductory clause.) Sentences definitely can’t begin with “cause,” or “b/c” BECAUSE those aren’t words. Sentences cannot end with a preposition. A good sentence in a subject class will repeat the question. FACTORS OF PRODUCTION 1. REVIEW: Joe is starting a cleaning service. He has an office space, water, cleaning materials and money to pay his initial costs. Which factor of production is missing? Land b. Labor c. Capital Entrepreneurship a. d. 2. Which factor of production includes all human-made materials needed to produce an item? a. Capital b. Entrepreneurship c. Labor d. Land 3. What is the basic economic concept that indicates there is always going is to be wants not fulfilled? a. Inflation b. Rationing c. Scarcity d. Trade-off WHICH FACTOR OF PRODUCTION? 1) oil 2) a master’s degree 3) making a sandwich 4) screwdriver 5) Bill Gates 6) 20 years of being a plumber 7) soil 8) building 9) a robot 10) designing software FACTORS OF PRODUCTION Give as many examples as you can for each factor of production seen in the clip. 1. Land 2. Labor 3. Capital- Physical and Human 4. Entrepreneur Unwrapped- Nerds Unwrapped- Sugar Sugar Handmade Lollies ECONOMIC CHOICES P. 205 Trade-off – an alternative we sacrifice when we make a decision. Ex. You want money to pay for gas but you also want to play football. You choose to get a job rather than playing football. What is the trade-off? Why do you have to decide between playing football and working? ECONOMIC CHOICES Countries must make choices each day – economists (one who studies economics) describes the trade-off countries face by the example of “GUNS OR BUTTER” If a country produces more military goods (guns) then the country has fewer resources to devote to consumer goods. (butter) ECONOMIC CHOICES Can a country make unlimited amounts of guns AND butter? NO!!!!!!…. remember, resources are limited! Take steel for example, if the country is using steel to make weapons, then that steel cannot be used to make equipment needed to produce butter. ECONOMIC CHOICES Opportunity Cost – the most desirable alternative given up as a result of a decision. Ex. If you have enough money to go to either a dinner OR a movie and you choose the movie, What is your opportunity cost? OPPORTUNITY COST What is Opportunity Cost? video ECONOMIC CHOICES Example: Basketball team vs. Job Decision: Join the Basketball Team Benefits? Opportunity Cost? Other Trade-offs? ECONOMIC CHOICES Example: Basketball team vs. Job Decision: Get a Job Benefits? Opportunity Costs? Trade-offs? ECONOMIC CHOICES Thinking at the Margin – deciding whether to use one additional unit of some resource. CONSIDER THIS EXAMPLE. JOE IS TRYING TO DECIDE IF HE SHOULD STAY UP LATE TO STUDY… HELP JOE MAKE HIS DECISION. Options Benefit 1 hour of study time 2 hours of study time 3 hours of study time C on the test B on the test B+ on the test Opportunity Cost 1 hour of sleep 2 hours of sleep 3 hours of sleep ** At what point is Joe paying an added cost with little benefit? (In other words, when should Joe stop studying?) ECONOMIC CHOICES Options Benefit 1 hour of study C on the test time 2 hours of B on the test study time 3 hours of B+ on the test study time Opportunity Cost 1 hour of sleep 2 hours of sleep 3 hours of sleep Is it worth it for Joe to study 3 hours? At 3 hours it is no longer worth Joe’s time to continue to study. He is not getting the same results as when he studied for one hour and for 2 hours. ASSIGNMENT: COST-BENEFIT ANALYSIS Decision 1. Being on time to class 2. Buying a new cell phone 3. Working on Friday night 4. Sleeping late 5. Playing on the Butler basketball team 6. Graduating from high school 7. Being late for curfew 8. Not studying for a test Benefits Opportunity Costs OPPORTUNITY COST AND PRODUCTION POSSIBILITIES CURVE VIDEO p. 206 in manual PRODUCTION POSSIBILITIES CURVE PRODUCTION POSSIBILITIES CURVE Productivity: the degree to which resources are being used efficiently to produce goods and services. Production Possibilities Curve: graph that shows alternative ways to use an economy’s resources. Draw this in your notes PRODUCTION POSSIBILITIES CURVE Production Possibilities Frontier: line on the production possibilities curve that shows maximum possible output for an economy. **growth in an economy can cause a shift in the production possibilities curve** Draw this in your notes PRODUCTION POSSIBILITIES CURVE Underutilization: using fewer resources than an economy is capable of using. *A Incentive: a reward offered to try to persuade people to make certain economic actions. Freakonomics: The Grade Experiment How A Middle School Principal Convinced Students to Come to School PRODUCTION POSSIBILITIES CURVE Other Important Vocabulary: Non-Renewable resources: a resource that cannot be replaced once it is used (ex: fossil fuels, coal, oil, etc). Renewable Resources: a resource that is capable of being naturally restored or replenished (ex: trees). PRODUCTION POSSIBILITIES CURVE Other Important Vocabulary: Consumer: a person who buys or uses goods and services. Producer: a person who makes goods and services available to consumers. PRODUCTION POSSIBILITIES CURVE Other Important Vocabulary: Wage: the payment for the service of one unit of labor, usually per hour. Salary: a fixed income which is usually paid on a weekly, biweekly, or monthly basis. ASSIGNMENT P. 207 - CLASS WORK Create a production possibilities curve using the following data. Watermelons (millions of tons) Shoes (millions of pairs) 0 15 8 14 14 12 18 9 20 5 21 0 ASSIGNMENT 16 14 12 10 8 S h o e s Series1 6 4 2 0 0 Watermelons 10 20 30 ASSIGNMENT What is the opportunity cost of choosing to produce the combination of goods shown at point c (14, 12) instead of that shown at point d (18, 9)? 16 14 12 10 8 Series1 6 4 2 0 0 10 20 30 ASSIGNMENT If this society were to invest in newer technologies, what would happen to this production possibilities curve? If this economy were to produce a combination of 5 million tons of watermelons and 8 million pairs of shoes, it would be producing at a point of underutilization. Label the point (5,8) as point g. 16 14 12 10 8 Series1 6 4 2 0 0 10 20 30 CLASSWORK AND HOMEWORK “Scarcity, Decision Making, Opportunity Cost Scenarios” p. 208 in manual 18.2, p. 204 “Making Economic Choices” WARM-UP QUESTIONS Name an example of a need. Name an example of a want. What is the difference between a good and a service? What is the goal of economics? What are the 4 Factors of Production? Under each one, list the factors of production used to make this candy bar. So Natural Resources: Cocoa beans to make chocolate, etc….