Basics of Economics
What is economics?
The branch of knowledge concerned how people/communities/businesses make choices given scarce resources
At what point on the PPC is the economy operating at its most efficient?
Production Possibilities Frontier (PPF)
Macy can spend her paycheck eating at her favorite pizza parlor, or buy books. The pizza parlor decides to use a different cheese, which Macy does not like. What effect does this have on Macy's PPC/PPF?
Movement along the PPF towards books
The law that states that my 5th cup of coffee has much less utility than the first cup for Mr. Bertollo.
What is the "Law of Diminishing Marginal Utility?"
An economic system based on strict social norms, and is limited to trade/barter systems.
What is a "Traditional Economy?"
Define Scarcity
limited number of resources in the world/finite resources
A point below the PPF is considered...
Inefficient
Paul can either spend his time studying or working. What event might occur that would cause Paul's PPC to increase (Shift Right)
-Increase in Paul's overall time
-Change in the amount of time it takes for Paul to complete either task
Pull up Jeopardy 200 File
A type of economy where the economic decisions are made by the government.
What is a "command economy?"
What are the four factors of production and give an example of each.
-Land
-Labor
-Capital
-Entrepreneurship
What is opportunity cost?
The value of your most likely alternative option (your 2nd choice, only!!)
A nation can choose between building cars and building tanks. What is an event that could take place that would result in the nation's PPC to shift to the left?
-Trade Partner is unable to supply materials
-Nation's workforce goes on strike
-Environmental Destruction
-Etc.
Pull Up Jeopardy 300 File
3 Cups of Lemonade
Describe the difference between Microeconomics and Macroeconomics?
Micro - Focuses on the economic decisions and factors that affect it of an individual actor
Macro - Focuses on forces impacting the entire economy
Mr. B has the option of watching TV, doing school work, or playing with Elle the pup. He is really not in the mood to do any work, and decides to play with Elle over watching TV. What is Mr. B's opportunity cost?
Watching TV
A small bakery can produce cupcakes or cookies. Each cupcake requires $3 worth of ingredients, and each batch of cookies requires $2 worth of ingredients. The bakery has $24 worth of ingredients available today.
Chart and Graph the most efficient options the bakery can make.
Consult Teacher for answer.
Pull Up Jeopardy 400 File
4 Slices of Pizza
In a Market Economy, what factors contribute to economic decisions?
What are "Individual Choice" and "Self-Interest?"
Supply and Demand are also acceptable
Describe the difference between formative and normative economic statements?
Positive Economics - Attempts to understands why certain behaviors and economic operates
Normative Economics - Analyzes outcomes and evaluates whether they are good/bad, and offer recommendations
Define the Production Possibility Curve.
A graphical representation of the trade-offs between two options given the resources of an economy.
A tech workshop can produce phone chargers for $5 of materials, or portable speakers for $10 of materials. The shop has allocated $100 for their materials budget.
Chart and graph the most efficient options for the workshop. What is the OC for producing 6 speakers?
6 speakers = $10s/$5c = 2 c/s x 6s = 12 chargers
Pull Up Jeopardy 500 File
4 Tickets
What are the 3 essential economic Questions?
What will be produced with limited resources?
How will goods/services be produced?
For whom will the goods/services be produced?