Topic 1.3 PPF

1.3 Production Possibilities Graph

Production Possibilities Graph – Graph that shows alternative ways to use an economy’s resources

GRAPH






Efficiency – Using resources in such a way as to maximize the production of goods and services

Cost – To an economist cost is the alternative that is given up because of a decision. Note: this is not the definition that you may be used to because it does not necessarily refer to money.

Law of Increasing Costs – As we shift factors of production from making one good or service to and, the cost of producing the second item increases

Underutilization – Using fewer resources than an economy is capable of using

Shifts in the PPF

Growth => Increase in the FOP; Increase in technology.
⇨ Outward shift of the PPF

Contraction => Decrease in the FOP, possible from war.
=> Inward shift of the PPF

Topic 1.2 Opportunity Cost Notes

1.2 Opportunity Cost

Trade-off – An alternative that we sacrifice when we make a decision

EX: Having a part-time job might prevent one from playing on the football team. A farmer who plants cherry trees cannot also grow apples on the same land.

Guns or Butter – A phrase that refers to the trade-offs that nations face when choosing whether to produce more or less military or consumer goods.

EX: Resources are limited! Steel being produced could be used to make tanks or butter factories.

Opportunity Cost – The most desirable alternative given up as the result of a decision.

EX: The opportunity cost of spending your savings on a computer is not being able to go on a trip.



Which would use choose?
-Sleep late or wake up early to go on vacation to Cancun?
-Sleep late or wake up early to eat breakfast?
-Sleep late or wake up early to study for a test?

Questions
1. What are some possible things you going to do after school today? List three examples that illustrate how decisions involve trade-offs.

2. Suppose that you can save $50 by buying your car in a different city. If the trip requires only $10 in gasoline, is the trip worthwhile? Why or why not? (Consider other factors beside money)

3. Determine an opportunity cost for each of the following. (a) eating pizza; (b) going to see a movie on a Tuesday; (c) going to see a movie on a Saturday; (4) watching television.

Topic 1.1 Notes

Topic 1

Section 1.1 Scarcity and the Factors of Production

Need – Something like air, food or shelter that is necessary for survival


Want – An item that we desire but that is not essential to survival

Economics – The study of how people seek to satisfy their needs and wants by making choices


Scarcity – Limited quantities of resources to meet unlimited wants


Goods – Physical objects such as clothes or shoes


Services – Actions or activities that one person performs for another



Shortage – A situation in which a good or service is unavailable

Scarcity always exists while a shortage can last a few days (holiday shopping) to years (wars).

Factors of Production – Land, labor and capital; the three groups of resources that are used to make all goods and services

Land – Natural resources that are used to make goods and services

Natural resources are materials found in nature including fertile land for farming and products that are in or on the land, such as coal, water and forests.

Labor – The effort that people devote to a task for which they are paid

EX: Doctor performing surgery, assembly line worker

Capital – Any human made resource that is used to create goods and services. Fall into two categories: human and physical capital.

Physical Capital – All human-made goods that are used to produce other goods and services.

EX: tools (i.e. sewing machine) and buildings (i.e. shoe factory.)

Makes people more productive-dishwasher saves time, adds knowledge (the family learns more about appliances like washing machines and dryers) and more productivity (extra time and knowledge lets the family do other chores or activities that are beneficial to the family.)

Human Capital – The skills and knowledge gained by a worker through education and experience

EX: Assembly line workers use skills and equipment acquired through experience and training to produce goods.

Entrepreneur – Ambitious leader who combines land, labor, and capital to create and market new goods and services.

EX: Bill Gates, Henry Ford


Economists say that all goods and services are scarce because land, labor and capital used to create them are scarce.

Questions
1. Why is the idea of scarcity a starting point for thinking economically?


2. What role do entrepreneurs play in the economy?


3. Which factor of production is represented by each of the following? (a) an office building; (b) an assembly line worker; (c) a tree used to make paper; (d) unused soil; (e) an artist; (f) a student


4. Why might an economist look at hundreds of cars moving along an assembly line and say, “There is an example of scarcity”?

Syllabus

Economics

Welcome to Economics! First, I would like to introduce myself to you. I am a student teacher in the Masters and Certification Program in Secondary Education at the University of Michigan. Additionally, I am student teaching with Mrs. James in Algebra and Geometry, so if I am not in room 306, I'll be in the Freshman Center in room 508. Before entering teaching, I was an undergrad at the University of Michigan and I received my economics and math degree in 2007. I look forward to teaching and getting to know you this semester.

TOPICS COVERED: This course will cover 8 main topics. It is recommended that you organize your course binder according to the following topics:
Topic 1: What is Economics? Topic 5: Supply
Topic 2: Economic Systems Topic 6: Prices
Topic 3: American Free Enterprise Topic 7: Financial Markets
Topic 4: Demand Topic 8: Money & Banking



SUGGESTED SUPPLIES: Supplies should be brought with you to class everyday!
• Three-ring binder- Keep your graded assignments and organize your homework and notes in the binder. Organized information is a valuable resource when preparing for graded assessments.
• Pencil (recommended) or Pen
• Notebook- to be used for this class only


ABSENCE POLICY: If you are absent from class, it is your responsibility to find out what you missed. If you miss a quiz or test you will be expected to take the quiz or test the day you return to class. Failure to do so will result in loss of points.


HOMEWORK POLICY: All homework is due at the start of class. Homework submitted 10 minutes after the bell has rung or later will receive half credit. Late homework for each marking period will be accepted no later than two weeks before the end of the marking period.

EXPECTATIONS:
-Be in the classroom and in your seat when the bell rings.
-Show respect for yourself, your peers and your teacher.
-Be prepared for class.
-Do your own work. Cheating or copying will not be tolerated. You will receive a zero on the assignment or test. Please note that the student handbook states that a second cheating violation results in a failing grade for the semester.
-Participate in class.
-No food or drink in the classroom other than bottled water.

GRADES:
Your grade each term will be determined by the following simple scale:
Homework/In-Class Assignments – 40%
Tests/Quizzes – 50%
Participation – 10%
This scale has the following implications:
• You cannot expect to receive a good grade if you don’t turn in most of your homework assignments.
• The highest grade you may receive if you don’t participate, assuming everything else is completed perfectly, is an A-. Volunteering questions, comments, and answers in class discussion and contributing to classmates during group work are two good examples of participation. Poor behavior will directly affect your participation grade.


GRADING SCALE Final Grade for Semester (subject to change)
A 12 93-100 First marking 40%
A- 11 90-92 Second marking 40%
B+ 10 87-89 Midterm/Final Exam 20%
B 9 83-86
B- 8 80-82
C+ 7 77-79
C 6 73-76
C- 5 70-72
D+ 4 67-69
D 3 63-66
D- 2 60-62
--------------------------
E 1 0-59