Economics 3/14/11
http://mrmilewski.com
• OBJECTIVE: First day of school administrative
stuff.
• I. Welcome Back 
• II. Attendance
• III. Distribution of:
-syllabus, points, and test dates
-textbooks
-desks, fans, floor, & bags
• IV. Homework
Last name, First name __-___
• New text
Important Stuff
• Web-site: http://mrmilewski.com
• Desks, fans, floor, & bags
• Homework Due Monday 3/21/11
1.) Book covered
2.) Syllabus signed and returned
• Homework Due Tuesday 3/22/11
1.) Chapter#1 Homework
2.) Chapter#1 Review
Economics 3/15/11
http://mrmilewski.com
• OBJECTIVE: Examine the fundamental economic
problem & the factors of production.
• I. Journal #1 pt. A
-Read “The Global Economy” p.9
-Answer questions (1-3) p.9
II. Journal #1 pt. B
-notes on the fundamental economic problem
• III. Goods & Service Quiz
• IV. Homework Due Monday:
1.) Book cover
2.) Syllabus signed and returned
Important Stuff
• Web-site: http://mrmilewski.com
• Homework Due Monday 3/21/11
1.) Book covered
2.) Syllabus signed and returned
• Homework Due Tuesday 3/22/11
1.) Chapter#1 Homework
2.) Chapter#1 Review
The Fundamental Economic
problem is:
• Scarcity - the condition that results from
society not having enough resources to produce
all the things people would like to have.
• Economics - the study of how people try to
satisfy what appears to be seemingly unlimited &
competing wants through the careful use of
relatively scarce resources.
Need v. Want
• Need - a basic requirement for survival &
includes food, clothing, and shelter.
• Want - a way of expressing need.
Scarcity
http://www.autolife.umd.umich.edu/Race/R_Overview/Rouge_Plant.htm
Ford Rouge Plant
• Since people have
unlimited wants &
limited resources,
scarcity leads to
choices.
1.) What to produce?
2.) How to produce?
3.) For whom to
produce?
The Factors of Production
• LAND – the gifts of nature
• LABOR – people with all their efforts & abilities
• CAPITAL – the tools, equipment, machinery, and
factories used in the production of goods &
services
• ENTREPRENEURS – a risk taker in search of
profits who does something new with existing
resources
Goods & Services
• Goods - an item that is economically
useful or satisfies an economic want
• Services - work that is performed for
someone
• Consumer – a person who uses goods &
services
Types of goods
http://www.leaderproduct.com.tw/images/robot.jpg
http://www.nerdgirl.com/sights/data/media/82/Image84.jpg
• Consumer good – intended
for final use by individuals
(personal computer,
dishwasher)
• Capital good – manufactured
goods used to produce other
goods (robot welder, oven in a
bakery, computer in a H.S.)
• Durable goods – a good
intended to last 3 years or
more when used on a regular
basis (can be both a consumer
good or a capital good)
• Nondurable good – a good
that lasts less than 3 years
(food, notebook, shampoo)
Goods v. Services
• The difference
between goods and
services is that a good
is tangible, services
are not.
http://www.rotten.com/library/culture/indian-call-centers/cs_center2.jpg
Quiz!
http://metrolinx-consult.limehouse.com/events/2004/images/web/122786_1_0.jpg
Economics 3/16/11
http://mrmilewski.com
• OBJECTIVE: Examine the paradox of value
and the circular flow.
• I. Journal #2 pt. A
-Read the “Business Week Newsclip” p.11
-Answer questions (1-2) p.11
• II. Journal #2 pt. B
-notes on wealth, circular flow, and Adam Smith
• III. Homework due Monday!
1.) Book covered
2.) Syllabus signed and returned
Value, Utility, & Wealth
• Paradox of Value – some necessities like
water have little monetary value, whereas
some non-necessities, like gold, has a much
higher value.
• Scarcity is not enough to create value. It
must have utility.
• Utility – the capacity to be useful and
provide satisfaction.
Wealth
• So, for something to have value it must be scarce
and have utility.
• Wealth – the accumulation of those products that
are tangible, scarce, useful, and transferable from
one person to another.
• A nations wealth are determined by the total
amount of it’s peoples skills (Adam Smith) plus
it’s natural resources, capital equipment, stores,
houses, and all other tangible assets.
The Circular Flow p.15
• The Market – a location or other
mechanism that allows buyers and sellers to
exchange a certain economic product.
• Factor Markets – where productive
resources are bought and sold.
• Product Markets – where producers sell
their goods and services to consumers.
• Read “Profiles in Economics” p.18
-Answer questions (1-2) p. 18
Adam Smith
• He is the father of
Modern Economics
• He wrote the Wealth
of Nations in 1776
• In it he said that
governments need to
stay out of the
economy as much as
possible. laissez-faire
The Invisible Hand
• People and business operate in their own self-interest.
• Competition acts like an invisible hand which will
allocate resources to ONLY their most productive uses.
• Example- if Milewski automotive made cars that
exploded after 3,000 miles nobody would buy these
defective autos.
• The company would go out of business freeing up the:
-labor used to make the cars
-land used in the cars (steel, glass, etc…)
-financial capital invested in the company
• Thus, making these factors of production available to
other productive and efficient automakers.
Division of Labor
• Division of Labor – work is arranged so
individuals do fewer tasks than before.
• Specialization – factors of production
perform tasks more efficiently than others.
• Human Capital – the sum of the skills,
abilities, health, and motivation of the
people.
TINSTAAFL
• There is no such thing as a free lunch
Other terminology:
• Inverse relationship – as one number goes
up, the other number goes down
• Direct relationship – as one number goes
up, so does the other number.
Economics 3/17/11
http://mrmilewski.com
• OBJECTIVE: Examine the concepts related to
Fundamental Economic Concepts.
• I. Chapter#1 Guided Readings
Complete the following activities due today!
-Chapter#1 section#1 Guided Reading
-Chapter#1 section#2 Guided Reading
-Chapter#1 section#3 Guided Reading
-Chapter#1 Enrichment
• II. Chapter#1 Review
-Work on Chapter#1 Homework &/or Review for
Chapter#1 Test
Economics 3/18/11
http://mrmilewski.com
• OBJECTIVE: Examine gold mines.
• I. Administrative Stuff
-Attendance
• II. Modern Marvels: Gold Mines
-answer questions about film
• III. Review for Chapter#1 Test
-independent study time
• NOTICE: Book Cover & Syllabus Due Monday!
• NOTICE: Chapter#1 Test Tuesday