Welcome

Welcome to
to Summer
Summer
Economics
Economics
Ms. J. Hernandez
Jhernandez@sja.us
 Materials You Will Need
to Bring to Class EVERYDAY
• Notebook with Pockets for Handouts
• Black or blue pen
• Red Pen
• Highlighter
• Calculator
 Other Materials You will
Need for Outside of Class
• Textbook: Economics Principles and Practices
• Access to Internet
• Access to Computer and Printer
• Laptop Availability?
 Chapter 1
What is Economics?
1-1: Scarcity
and the Science of Economics
Please read pages 6 – 7.

Define these key vocabulary terms:

1. Scarcity
2. Need
3. Want
4. TINSTAAFL

Answer the following questions:

1. What is the fundamental economic problem facing all
societies?
2. What is the difference between a need and a want?

Video
Scarcity is the fundamental economic problem that
forces consumers and producers to use resources
wisely.

Unlimited Limited
Wants Resources

Scarcity

Choices

WHAT FOR WHOM

to produce HOW to produce
to produce
Factors of Production or Resources
Please read pages 8 – 10 and complete the table.

Define these key vocabulary terms:

1. Gross Domestic Product (GDP)

List four key elements to the study of Economics

and give a brief description of each one.
1-2: Basic Economic Concepts
Goods, Services and Consumers
– A good is something tangible. It is an economic product
that is useful, relatively scarce, and transferable to
others.
• Capital good - manufactured good used to produce other
goods or services.
• Consumer goods – goods intended for final use by individuals.
• Durable good – good that lasts for at least 3 years when
used regularly.
• Nondurable good – good that wears out or lasts less than 3
years when used regularly.
– A service is an economic product that is work or
labor performed for someone. It is not
tangible.
– A consumer is a person who uses goods and
services.

Value, Utility, and Wealth

– Value is the monetary worth of a good or a
service as determined by the market.
– Utility is the ability or capacity of a good or
service to be useful and give satisfaction to
someone.
– Wealth is the sum of tangible economics goods
that are scarce, useful, and transferable from
one person to another.
– The paradox of value is the apparent
contradiction between the high monetary value
of a nonessential item and the low value of a
necessity.
– For an item to have monetary value, it must
have utility and be scarce.

The Circular Flow of Economic Activity

– A market is a meeting place or mechanism
that allow buyers and sellers to come together.
– A factor market is a market where factors of
production are bought and sold. A product
market is where goods and services are bought
and sold.
– Chart
Productivity and Economic Growth

Please read pages 16 – 17.

Define these key vocabulary terms:

1. Economic Growth
2. Productivity
3. Human Capital
4. Division of Labor
5. Specialization
6. Economic Interdependence
1-3: Economic Choices
and Decision Making
• Graph Review
• Individual PPC
• Opportunity Cost

Trade-Offs and Opportunity Costs

• Every decision we make has trade-offs, or alternative
choices.
• Opportunity cost is the cost of the next best
alternative use of money, time, or resources when
making a decision.
Society's PPC
PPC and Resource Changes

Increase Increase
in Resources in Productivity
Thinking Like An Economist
• Build an economic model, a simplified equation,
graph, or figure showing how something works.
• Consider direct cost + opportunity cost.
• Apply cost-benefit analysis, comparing the cost of
an action to its benefits.