What is Economics Main Idea: Scarce resources affect everyone and economists simplify the world to help us understand it. Economics Scarcity Factors of production Land Labor Goods Services Capital Productivity Entrepreneurship technology How does what we want differ from what we need? Give an example: How does this affect choices we make as consumers? How does scarcity affect us all? List and give a short description of the 4 factors of production a. b. c. d. Main Idea: The effects of our economical choices are long lasting Trade-off Opportunity cost Production possibilities curve How can we relate trade offs and opportunity costs? How can we show society’s trade off in a production possibilities curve? Main Idea: Economists are social scientists who study the ways individuals and nations use their resources. Microeconomics Macroeconomics Economy Economic model hypothesis How do economists use models (charts and graphs) to study the real world? Why do you think there are different types of economic thought? Main Idea: We have many choices as consumers. Our choices make our economy different from other countries. Economic system Traditional economy Command economy Market economy Market Circular flow of economic activity Mixed economy What are the 3 questions that all economic systems must answer? a. b. c. What are the differences of the main economic systems? System: 1. 2. 3. 4. Similarities Differences Main Idea: The American System is an economy based on a free market. A Seller can choose to make a product or not. A consumer can choose which products they want to buy. Capitalism Laissez-faire Free enterprise system Profit Profit incentive Private property competition What is the role of government in our free enterprise system? How do freedom of enterprise and freedom of choice apply to the American Economy? What roles do the following play in American Economy? A. Private property B. Profit incentive C. Competition Main Idea: The US’ goals are evident in the Constitution, government policies, and actions of its people. Economic efficiency Economic equity Standard of living Economic growth List and give a brief description of the major goals of a market economy: A B C D E F G How can Americans balance economic rights with economic responsibilities?