 Would
you rather buy three (3) slices
of pizza for $4 or six (6) slices of pizza
for $5?
 Explain
DO NOW
your reasoning!
CHAPTER I
What is Economics?

Work individually to write down different topics that
come to mind when you hear “economics”

Work in groups of four to review your topics by
sharing ideas, clarifying ideas, and eliminating
duplicates

Work with group to sort ideas into different
categories

Walk around the room to explore other groups’
categories

One person from each group should stay behind to
explain thinking of group as to why they had broken
topics as such

Return to tables to add new topics, if necessary

Metacognitive processing: process how you went
about your thinking as you generated, sorted,
categorized, labeled, and analyzed the work of
others
SORT CARDS

Economics is about making choices

The “Economic Problem”: Although your
wants, or desires, are virtually unlimited, the
productive resources available to help
satisfy these wants are scarce

Scarcity: condition facing all societies
because there are not enough
productive resources to satisfy people’s
unlimited wants
ECONOMIC CHOICES

Productive Resources: also known as
“factors of production”, these are the inputs
used to produce the goods and services
that people want

Because productive resources are
scarce, goods and services are scarce,
too


Must choose between many wants
Problem of scarce resources but
unlimited wants exists for every individual

Must make choices as a result!
ECONOMIC RESOURCES

Economics: examines how people use
scarce resources to satisfy unlimited wants

Example: taxicab driver uses cab and
other scarce resources, such as
knowledge of city, driving skills, gasoline,
and time, to earn income

Use income to buy housing, groceries,
clothing, and vacation
ECONOMIC RESOURCES

Pair & Share: With a partner, give an
example of using a scarce resource in order
to earn an income based on the definition
just provided.

This can be through any job within the
career you’d like to have one day

Then explain what goods/services you
may purchase with that income to satisfy
your needs and wants
ECONOMICS ON DISPLAY
 Include
three (3) factors of production:
1.
Human resources
2.
Natural resources
3.
Capital resources
PRODUCTIVE RESOURCES

Human Resources: broad category of human efforts,
both physical and mental, used to produce goods
and services

Labor: physical and mental effort used to produce
goods and services

Comes from a more fundamental human resources: time
 Allocate
time according to alternative uses
 You
can have a job and earn or wage, or you can
choose to spend your time sleeping…your choice!
PRODUCTIVE RESOURCES
 Human
resources include special skills of
an entrepreneur, who tries to earn a
profit by developing anew product or
finding a better way to produce an
existing one
 Profit
provides incentive that makes
entrepreneurs willing to accept risk of
losing money
PRODUCTIVE RESOURCES

Natural Resource: “gifts of nature”; include
land, forests, minerals, oil reserves, bodies of
water, and even animals

Renewable: can be drawn on indefinitely
if used wisely


Examples include timber, air, water
Exhaustible: does not renew itself and is
thus available in a limited amount

Examples include oil and coal
PRODUCTIVE RESOURCES

Capital goods: include all human creations
used to produce goods and services


Consist of factories, tools, trucks,
machines, computers, buildings, airports,
highways, and other manufactured items
employed to produce goods and
services
All of these resources combined in variety of
ways to produce goods and services
PRODUCTIVE RESOURCES
 Role
Play: Create a scenario in
groups of five that depict a
business using different types of
resources (at least two of each
type described above)
 Other
groups must recognize at least
one example of each type of
resource previously mentioned in the
lecture)
SCENARIOS

Each person of group assigned a number
one through five

Each person must understand the answer
to the question that will be posed

Once I call on a number, that person
must be able to answer the question for
their group

What are scarce resources and what
would be the remedy to that scarcity?
Come up with as many examples as
possible in two minutes using the three
types of resources just
mentioned…winner gets…
NUMBERED HEADS TOGETHER

Good: tangible – something you can see,
feel, and touch

Example: corn


Farmer, tractor, 50 acres of land,
seeds and fertilizer are all resources
that create that good
Service: intangible – not physical, yet uses
scarce resources to satisfy human wants

Skills or tasks performed in exchange for
money
GOODS AND SERVICES

Opposite sides of room: Are there
goods/services you believe you can attain
for free?

All goods involve a cost to someone

Your free lunch may seem free to you, but it
draws scarce resources away from the
production of other goods

Those who provide a free lunch often
expect something in return

“The only place you find free cheese is in
a mousetrap”
NO FREE LUNCH

A good or service is scarce if the amount
people desire exceeds the amount
available at a zero price

Things we want none of at a zero price are
called bads

Clean air and clean seawater have
become scarce

Goods that are truly free are not the subject
matter of economics. Without scarcity,
there would be no need for prices and no
economic problem
NO FREE LUNCH

How is the question posed for the Do Now
an economic choice?

How does it relate to the economic
problem?
CLOSURE