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Jan 10/11th. Include Lecture #1 into notebook (finished) Lecture #2 Scarcity -Make a page for this in your notebook. -Review Basic #1 -Scarcity Exercise Homework: -Opportunity Cost Worksheet :due 1.14/1.15.
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Jan 10/11th • Include Lecture #1 into notebook (finished) • Lecture #2 Scarcity -Make a page for this in your notebook. -Review Basic #1 -Scarcity Exercise Homework: -Opportunity Cost Worksheet :due 1.14/1.15 • This past Holiday season, what items were you not able to find in stores? The hot gift items?
Basic #1 • want— something we desire to have • resource— anything that is used to produce goods or service. For example, a person’s labor may be used to produce computers, TV sets, and much more, and therefore a person’s labor is a resource. • scarcity—the condition in which our wants are greater than the resources available to satisfy those wants. • opportunity cost—the most highly valued opportunity or alternative forfeited when a choice is made. • trade-off—A situation in which more of one thing necessarily means less of something else. • production possibilities frontier—a graphic representation of all possible combinations of two goods that an economy can produce. • rationing device—a means for deciding who gets what portion of the available resources and goods. • economics—the science that studies the choices of people trying to satisfy their wants in a world of scarcity.
How is choice related to scarcity? • Scarcity results in the need to make choices. Regardless of our level of income, each of use must make a choice when purchasing goods or services. Wants are unlimited but resources are limited—we have to choose which wants will satisfy us. • How is opportunity cost related to choice? • When we choose to purchase something a highly valued opportunity or alternative is forfeited. When we choose we make a trade-off.
Lecture #1: Scarcity, Choices, Trade-offs, & Opportunity Costs
REVIEW Remember you don’t have to write down stuff in red! • Okay class—time to review: • What is a want? • A want is something that we desire to have!
Answer the following questions in your notes! • You do not need to write down the questions—just the answers in complete sentences: • Describe one thing you did yesterday (how much time did it take)—went to the store, talked on the phone, read your economics book, etc. • NOW—write down something you could have done during that same period of time, had they not done what they did. • Have a couple of students share!
Answer the following questions in your notes! • Some people have suggested that one way of eliminating scarcity is to have fewer wants. • Do you think this is possible? • Which wants would you be willing to give up? • REMEMBER WANTS—ARE NOT JUST THINGS YOU BUY! Wants can be a college education, a high paying job, etc. • Have a couple of students share their responses!
Opportunity Costs Chart #1 • Copy the following chart in your notes: The most valued opportunity or alternative you give up to do something—the next best choice—is that something’s opportunity cost. Come up with 2 more examples on your own!
Opportunity Costs Cont. • Now I want you to think about some major activities in which you were involved in over the last year, such as traveling or buying a large-ticket item. • Create a table listing the Opportunity Cost of each activity and how much it was for each activity. (see next slide for example)
Opportunity Costs Chart #2 • Copy the following chart in your notes: Come up with at least 3 examples for your chart!
Answer the following questions in your notes! • Are monetary issues the only concerns when determining what action are taken? • What other concerns need to be considered when weighing opportunity costs? • Discuss your answers with the class!
Summary • When completing your notes you need to write a 3-5 sentence summary of the lecture. This is a part of your notes grade
Why Didn’t Chris Rock go to College? Page 9 Textbook • Read the article on page 9. • Answer the following question in your notebook: • What will be your opportunity costs for going to college? • How will costs differ to those of Chris Rock? • Share answers with the class!
Homework • Go to a few of your favorite stores or online stores and pick 5 products you would like to purchase. • Create an Opportunity Cost Chart with each item listed on the chart. • What are the most valued opportunities or alternatives you would give up to buy these items? • Are you willing to give up these opportunities for the enjoyment of the products?
