Daily Warm up Activity (HOT Section Notes): You get
$200 to spend on some clothes for school. What would
you buy? Rules:
1. Must buy at least 5 items.
2. Create a quick list of item and price ($)
3. Number your top two items.
4. If you were told later you could now only have one
item, what would you choose and why?
5. Why did you choose it over your #2 item?
Daily Warm Up Question
Name the four factors of production and give two
examples of each. Give two examples of entrepreneurs in
the world today that you know of and or admire. What
business are they in and how have they helped the
economy?
Unit One: Learning Objectives:
North Clackamas School District Social
Studies Priority Standards:
• Econ 53. Describe characteristics of
command, market, traditional, and mixed
economies and how they affect jobs and
standards of living.
• Econ 59. Demonstrate the skills and
dispositions needed to be a critical
consumer of information.
Lesson Two: Daily Learning Target
I Can define and explain in writing the
following key Economic concepts:
Trade-offs
Opportunity Cost
Thinking at the Margin
ECONOMICS Review from lesson #1…..
Hot Question #1: What is scarcity?
Scarcity exists. We have endless desires
but limited resources.
In Economics, we must choose.
H.O.T. Question # 2: Define “Trade-off” in your own words
and give an example.
• A trade-off occurs when we choose one course
of action over another or one benefit over
another . (K.I.M. Vocabulary Definition #1)
• In Economics, we can never have everything we
want or need.
• We must make choices.
• A woman spends ten dollars buying her lunch at
a local restaurant. She cannot use the same ten
dollars to buy a book. A trade-off has occurred.
Again….It’s All About Scarcity!
• Scarcity exists. Our wants and desires are
limitless but our natural resources are
limited.
• We can always want more than we have.
As such, we are constantly choosing one
course of action over another.
• We cannot spend ten dollars on a movie
ticket and the same ten dollars on a
restaurant meal.
H.O.T. Question #3: What are the tradeoffs in the following
scenarios (what benefit do you lose or give up?)
1. Dre works on his homework until 3:00 A.M. in the
morning to prepare for his test at 7:00 AM at O.S.U.
2. Mr. Kirby blows his entire paycheck at Spirit Mt. Casino
at the blackjack table.
3. Mr. Seymour takes out all his money from his
retirement account to use as a down payment on a
house.
4. A farmer wants to plant corn, broccoli and wheat on his
property, but only plants wheat.
5. The government during war time decides to use all of
it’s steel to produce tanks and ships.
Opportunity Cost (K.I.M. Vocabulary #2)
• Whenever we make a decision, we receive one
thing but give other things up.
• If I chose to study tonight for the examination, I
cannot go to the party or the movies or walk the
dog.
• The most desirable alternative given up for the
decision is the opportunity cost.
• Think of the opportunity cost as the best course
of action of all those things you didn’t get OR
• The most prized things(s) you gave up when
making a decision.
Opportunity Cost Continued:
HOT Questions:
4. What is the opportunity cost of you deciding to get
up every morning at 5:00 A.M. and go for a 5 mile
run.
5. What is the opportunity cost of you getting a job
next week working on the weekends.
12
Scarcity, Choice,
and Opportunity Cost
Limited Resources & Unlimited Wants
Scarcity
Choices
Opportunity Cost
13
The World of Trade-Offs
• Opportunity cost graphically
– The production possibilities curve (PPC)
represents all possible maximum combinations of
total output that could be produced.
– Along the production possibilities curve, there is a
fixed quantity of productive resources of a given
quality being used efficiently.
14
Production Possibilities Curve for Grades in
Mathematics and Economics (Trade-Offs)
0
Increments of 3 Hours
15
Production
Possibilities Curve (PPC)
HOT Questions:
6. What would happen to the production
possibilities curve if you spent more
time studying?
7. What would happen to your potential grades?
8. Is it possible that terms of the trade-off might
not be constant?
16
Scarcity and opportunity costs affect
individuals, businesses, and governments.
HOT Question #9: What does Guns or Butter
mean in economics?
• Government officials also must choose
where to spend tax dollars.
• When a government spends more money
on the military, it must invariably spend
less money on consumer goods like roads
and schools.
• Economists refer to government trade-offs
as Guns or Butter.
The Cost of War
Thinking at the Margin: KIM Vocabulary #3
• Sometimes a decision involves whether to
add or subtract one additional unit of a
resource.
• After studying many hours, a student
might ask herself: “Should I study one
more hour?”
• This question is a question at the margin.
Deciding whether to add or subtract one
additional unit occurs at the margin.
Should we study one more hour?
That is thinking at the margin.
HOT Questions for Reflection:
Discuss in groups: write your answers in
your notes.
10. Provide examples of trade-offs.
11. Why do trade-offs exist?
12. What is “the opportunity cost”?
13. Provide an example of an opportunity
cost?
Summary Paragraph
What is thinking at the margin? Provide an
example of thinking at the margin in the
space provided.
Problem Solving Activity #3
Grab an economics book with a partner off
the shelf;
Turn to page 12-Complete
“Critical thinking questions”
7-9 on page 12 and turn into
Mr. Kirby before the
End of the period.
Problem Solving Activity #3