what would you do?. economics: close to home consider it… o if you had a million dollars, what...
TRANSCRIPT
![Page 1: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/1.jpg)
What would you do?
![Page 2: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/2.jpg)
Economics:Close to Home
![Page 3: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/3.jpg)
Consider it…
o If you had a million dollars, what would you do with your money?
o Would you be able to afford everything you wanted?
o Would everything you wanted be available?o Could you use your money productively – to
produce more wealth?o How do these questions relate to us, even if
we don’t have a million dollars?
![Page 4: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/4.jpg)
What is Economics?Economics – the study of our efforts to satisfy our unlimited wants through the use of limited resources.
![Page 5: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/5.jpg)
Did you know?
The word “economy” comes from the Greek term meaning “running a household.”
The economic system of a country determines the way it is run.
![Page 6: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/6.jpg)
Without limited resources, nothing would be scarce. Without scarcity, there would be no economy.
![Page 7: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/7.jpg)
Something is scarce if someone is willing to pay for it.
![Page 8: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/8.jpg)
Economists divide scarce things into
two groups:
![Page 9: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/9.jpg)
Group 1: Goods
Goods are tangible items that you can hold. They are commodities such as sugar, lumber, or iPads.
![Page 10: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/10.jpg)
Group 2: Services
Services are intangible. They involve people spending their time meeting the needs of others such as a barber, musician or architect.
![Page 11: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/11.jpg)
Take a second to get a piece of loose leaf. Put your name and date at the top of the page.
![Page 12: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/12.jpg)
Goods or Service?
Goods:# 3, 5, 8, 10, 12
Services:#1, 2, 4, 6, 7, 9, 11
![Page 13: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/13.jpg)
Assignment:On the back side of your loose leaf, identify a benefit that each good or service provides to you and your family. Value = 10 marks
Goods • A bag of candy • A school book • A DVD • An apple • A pair of jeans
Services • A math lesson from your
teacher • A check-up from the doctor • A bus ride • A swim at the community
centre pool • A snow plow clearing your
street
![Page 14: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/14.jpg)
The City MarketThis painting by Richard Flynn depicts the City Market in Saint John, NB. People have been visiting this marketplace since 1876.
– What attracts us to market places?
– Do we go there for reasons other than to buy and sell?
– Can you think of modern markets where buyers and sellers do business without actually meeting?
![Page 15: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/15.jpg)
![Page 16: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/16.jpg)
Let’s review…
o Without scarcity, there would be no economy.
o Something is scarce if someone is willing to pay for it.
Let’s look at the following cases to understand the scarcity principle.
![Page 17: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/17.jpg)
Case 1: Question
Suppose that in the fictional land of Atlantis grow thousands of orange trees and only a few apple trees. Which fruit would be scarce?
An economist would need more information to decide.
![Page 18: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/18.jpg)
Case 1: Answer
If people of Atlantis never eat apples but love oranges, then, in the economist way of thinking, it is oranges that are scarce.
![Page 19: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/19.jpg)
Case 2: Question
Suppose that you set up a booth in the schoolyard to sell fresh air. Your business would likely fail. Why?
![Page 20: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/20.jpg)
Case 2: Answer
An economist would say that this happened because you were trying to sell something that was not scarce.
![Page 21: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/21.jpg)
Case 2: Answer
Yet there are circumstances where fresh air, pressurized air, or pure oxygen are quite scarce. In those situations it has a price.
![Page 22: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/22.jpg)
Case 2: Answer
Oxygen vending machines were common in Tokyo, Japan, when smog smothered the city in the 1970s. If you felt short of breath you could put a mask on your face, insert a coin, and inhale.
![Page 23: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/23.jpg)
Opportunity CostWhen something is scarce, it has to be rationed (limited).
![Page 24: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/24.jpg)
In economics, the usual way of determining who gets scarce things is price rationing.
The scarcer it is, the more it costs.
![Page 25: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/25.jpg)
For example, the guy with a lot of money gets the luxury car.
This is price rationing.
![Page 26: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/26.jpg)
The real cost of an item is determined by the things you
sacrifice, whenever you choose to spend money.
![Page 27: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/27.jpg)
“What else can I do with the money?”
![Page 28: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/28.jpg)
I have enough money for ONE…
![Page 29: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/29.jpg)
What is Opportunity Cost?
Opportunity Cost - What a person has to give up to buy something.
![Page 30: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/30.jpg)
For a rich person buying a car, the opportunity cost is low because they don’t have to give up much in order to afford it.
![Page 31: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/31.jpg)
For a poorer person buying a car, they might have to give up an opportunity to own a house, so the opportunity cost for them would be high.
![Page 32: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/32.jpg)
Impulse Buying - When we fail to weigh just how high the opportunity cost is. Often we buy things we can not really afford.
• Often we buy things we can not really afford.
![Page 33: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/33.jpg)
![Page 34: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/34.jpg)
![Page 35: What would you do?. Economics: Close to Home Consider it… o If you had a million dollars, what would you do with your money? o Would you be able to afford](https://reader035.vdocuments.us/reader035/viewer/2022062221/56649f3e5503460f94c5e63a/html5/thumbnails/35.jpg)