we will… role call and syllabus review economic activity: discovering scarcity chapter 1 notes ...
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Today’s Objectives – Day 1
We will… Role Call and Syllabus review Economic Activity: Discovering Scarcity Chapter 1 Notes
You will… Understand the course and its expectations Have a better understanding of how scarcity
and how it connects to Economics Understand basic concepts of Economics
including scarcity, positive and normative economics and the 7 principle of Economics
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Discovering Scarcity
1. Get into groups of 3 or 4 2. Scarcity Exercise
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Activity Questions
1. How did this activity exemplify the economic principle of scarcity?
2. What were some of the thoughts behind choosing a preference?
3. How does scarcity affect your daily life? Think of an example.
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ECONOMIC THINKINGWhat you need to remember to be
a good student of economics
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What is Economics? Economics is…
A Social ScienceA study of how resources are used
to their fullest potentialNOT directly concerned with
money or politics or the stock market
When you are trying to make the most out of what you have you are doing…Economics
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Macro vs. Micro What do you think is the
difference between the prefixes “macro” and “micro”?Write in on your note sheet
Compare it to a partner.
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Macro vs. Micro Macroeconomics =
economic issues of a nation
Microeconomics = economic issues of the individual and/or firm
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Examples of Types of Economics
What is an example of a macroeconomic issue?
What is an example of a microeconomic issue?
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Positive and Normative Economics
Positive EconomicsGives a concrete estimate to an
issueFocuses on facts and cause and
effect relationshipsBased on scientific method
Normative EconomicsUses value judgments and opinionsUsed to find the “best option”
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Positive Economics
Normative Economics
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7 Principles of Economics
1. PEOPLE CHOOSEScarcity forces people to choose 1
option over anotherEx: Sleep or get to school on time
2. PEOPLE’S CHOICES INVOLVE COST
Every choice has a cost and benefitEx: Sleep in = more rest, but
potential punishment OR No sleep = no punishment
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7 Principles Continued3. LIFE IS LIVED ON A MARGIN
Each additional item added has a marginal cost and a marginal gain – is one more worth it?
Ex: The GUM CHALLENGE
4. PEOPLE RESPOND TO INCENTIVES IN PREDICTABLE WAYS Incentives always change people’s decisions Ex: Sales – If two products are available and
one is on sale while the other isn’t, people may choose the cheaper one even if it’s a lesser quality
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7 Principles Continued5. PEOPLE GAIN WHEN THEY TRADE
VOLUNTARILY You can’t do everything – you trade
6. MARKETS COORDINATE TRADE Markets bring people together perfectly
without intervention
7. PEOPLE’S CHOICES HAVE CONSEQUENCES IN THE FUTURE
A choice today affects you and others later Ex: Going to lunch may mean you don’t
have enough money for the concert this weekend.
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EXIT SLIP 3-2-1
LIST THREE WAYS YOU USE ECONOMICS IN YOUR DAILY LIFE
DEFINE THE TWO FIELDS OF ECONOMICS
WRITE ONE NEWSPAPER HEADLINE WHICH ILLUSTRATES POSITIVE ECONOMICS