Economics 9/6/11 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

Estrada, Erik __-___

• New text

Important Stuff• Web-site: http://mrmilewski.com

• Desks, fans, floor, & bags

• Homework Due Monday 9/12/111.) Book covered2.) Syllabus signed and returned

• Homework Due Tuesday 9/13/111.) Chapter#1 Homework2.) Chapter#1 Review

Economics 9/7/11http://mrmilewski.com

• OBJECTIVE: Examine the fundamental economic problem & the factors of production.

• I. Economics Pre-test -20 minute 25 minute pre-test of Economic concepts

• II. Journal #1 pt. A-Read “The Global Economy” p.9-Answer questions (1-3) p.9

III. Journal #1 pt. B-notes on the fundamental economic problem

• IV. Homework Due Monday:1.) Book cover2.) Syllabus signed and returned

Important Stuff• Web-site:• http://mrmilewski.com

• Homework Due Monday 9/13/101.) Book covered2.) Syllabus signed and returned

• Homework Due Tuesday 9/14/101.) Chapter#1 Homework2.) 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• 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

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• 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

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

Economics 9/8/11http://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. Quiz#1• IV. Homework due Monday!

1.) Book covered2.) 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.

• Circular Flow Film

Quiz!

http://metrolinx-consult.limehouse.com/events/2004/images/web/122786_1_0.jpg

Economics 9/9/11http://mrmilewski.com

• OBJECTIVE: Examine the father of modern economics.

• I. Journal #3 pt. A-Read “Profiles in Economics” p.18-Answer questions (1-2) p. 18

• II. Journal #3 pt. B-notes on and Adam Smith

• III. Journal#3 pt.C -questions on Invisible Hand Film

• IV. Homework due Monday!1.) Book covered2.) Syllabus signed and returned

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.

Questions on the Invisible Hand• 1.) What is the price & opportunity cost of watching tv?

• 2.) What would and economist say about doing everything perfect?

• 3.) What balances supply & demand?

• 4.) What would an economist say about Justin selling water?

• 5.) How would crash proof cars effect driving?

• 6.) How do we grow cars?

• 7.) What would an economist say about Lincoln’s view on rails?

• 8.) What can turn coal into food?

• 23 minutes (library film)

Fall Rowing• Yes, we will have a fall program.

• Will start next week

• Tuesday, Thursday, & Saturday

• Cost: $75

• Must get new physical!

• Practice Time Saturday 9-11AM

• Tuesday & Thursday 4-6PM

• Find novices!!!