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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
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Last name, First name __-___
• New text
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Important Stuff• Web-site: http://mrmilewski.com
• Desks, fans, floor, & bags
• Homework Due Monday 3/21/111.) Book covered2.) Syllabus signed and returned
• Homework Due Tuesday 3/22/111.) Chapter#1 Homework2.) Chapter#1 Review
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Economics 3/15/11http://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 cover2.) Syllabus signed and returned
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Important Stuff• Web-site: http://mrmilewski.com
• Homework Due Monday 3/21/11
1.) Book covered
2.) Syllabus signed and returned
• Homework Due Tuesday 3/22/111.) Chapter#1 Homework
2.) Chapter#1 Review
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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.
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Need v. Want
• Need - a basic requirement for survival & includes food, clothing, and shelter.
• Want - a way of expressing need.
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Scarcity• Since people have
unlimited wants & limited resources, scarcity leads to choices.1.) What to produce?2.) How to produce?3.) For whom to produce? http://www.autolife.umd.umich.edu/Race/R_Overview/Rouge_Plant.htm
Ford Rouge Plant
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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
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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
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Types of goods• 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)
http://www.leaderproduct.com.tw/images/robot.jpg
http://www.nerdgirl.com/sights/data/media/82/Image84.jpg
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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
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Quiz!
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Economics 3/16/11http://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 covered2.) Syllabus signed and returned
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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.
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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.
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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.
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• Read “Profiles in Economics” p.18
-Answer questions (1-2) p. 18
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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
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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.
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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.
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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.
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Economics 3/17/11 http://mrmilewski.com
• OBJECTIVE: Examine the concepts related to Fundamental Economic Concepts.
• I. Chapter#1 Guided ReadingsComplete 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
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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