Agenda: Monday, 12/1

• Turn in: – Ch 1 in back

• Econoland Simulation

• Simulation Quiz

• ECONO =

Factory Here! Businesses only!

Must have: one unit of land, one unit of labor, one unit of capital goods to obtain one ECONO!

DO NOT LOITER IN FRONT!

Simulation Partner Questions

1. Name the factors of production. – How were they shown in this game? – Did their value change?

2. What is the role of an entrepreneur/ household? Be specific and general

– What is needed for each?

3. Explain the interdependence of the 2 groups 4. What made you successful? Un?5. Why did you work diligently?

– What or who caused you to do so?

6. What was the role of the government?

Does this chart represent the game? Why or why not?

Explain how the resources are transformed into wealth?

Adam Smith:

The Wealth of Nations 1700’s

Revolutionary book explaining these concepts for the first time…

Agenda: Tuesday, 12/2

• Econoland Quiz/review– Incentives

• Opportunity Cost Notes

• The Real OC!

• Opportunity cost problems

• Guns v. butter?

• Unit 1 review sheets

Opportunity Cost

• What is the difference?– Opportunity Cost

• #1 benefit refused to make a choice– Date: Ann v. Mary????? Or Doug v. Bill???

– Tradeoffs• 2 –infinity choices refused when a decision is made…

– Instead of buying car… Computer, flat screen, furniture… Vacation…

– Thinking @ the Margin • Combining opportunites… do part of this and part of that in

combination– 4-10 pm: See friend, study 2 hours, BB game, study & facebook….

Explicit Cost v. Implicit Cost

• Seen Costs• Money • Time—IF easily

calculated in terms of money (billable hours)

• Underlying costs• Unpaid time, effort• Mental anguish• Long term health• “Pain & Suffering”

– Stress, ostracized

Most answers on today’s exercise will deal with Implicit Costs!

Opportunity cost #1 example

• Detroit Harrisburg– What’s the cost of the trip?

• Bus $100 + 100= $200 +?• Plane $300+$20= $320 +?

• Bus $100+$500 = $600 +?• Plane $300+$100=$400 +?• Ticket + Time (OC) = Cost

1 hour & $300

5 hours & $100

$20 /hour

$100 /hour

TICKET Price