Check In Question: What do you think Economics is? How would you define it?

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Check In Question: What do you think Economics is? How would you define it? (If youre not sure, list any words that come to mind when you hear economics.). Reminders:. Core 1 due date moved again FRIDAY, APRIL 25 th !!! Test on TUESDAY, APRIL 22 nd !!!. THINK PAIR - SHARE. - PowerPoint PPT Presentation

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Intro to Economics

Check In Question:

What do you think Economics is? How would you define it? (If youre not sure, list any words that come to mind when you hear economics.)

Reminders:Core 1 due date moved againFRIDAY, APRIL 25th!!!Test on TUESDAY, APRIL 22nd!!!

THINK PAIR - SHARERespond to each question. Provide a thorough explanation for each decision. If you could choose between two nearly identical productsone that is free and one that you have to pay forwhich would you choose? Why? If you were opening a new business, would you select a location closer to or farther away from a business that sold a similar or even identical product? Why? If you could make a small change in your daily routine that would save you time and money, would you make the change? Why or why not?

Youre already thinking like an economist and you didnt even know it!Objective:Economics, 7 Principles, EnigmasIntro to EconomicsCheck In Question:

What do you think Economics is? How would you define it? (If youre not sure, list any words that come to mind when you hear economics.)

ECONOMICSDepends on the economist and how they are viewing a particular situation.

ECONOMICSAnalyzing how people use their scarce resources to satisfy their unlimited wantsStudying how people make choices (science of decision making)Applying positive economics (how the economy actually works) and normative economics (how the economy ought to work)Explaining everyday mysteries and enigmas

By necessaries I understand, not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without. A linen shirt, for example, is, strictly speaking, not a necessary of life. ...But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt ... Custom, in the same manner, has rendered leather shoes a necessary of life in England. The poorest creditable person of either sex would be ashamed to appear in public without them. ... Under necessaries, therefore, I comprehend, not only those things which nature, but those things which the established rules of decency have rendered necessary to the lowest rank of people. Adam Smith, Wealth of Nations

ECONOMICSAnalyzing how people use their scarce resources to satisfy their unlimited wantsStudying how people make choices (science of decision making)Applying positive economics (how the economy actually works) and normative economics (how the economy ought to work)Explaining everyday mysteries and enigmasThe Tools of the TradeScientific Method, of course!

Ask questionResearchHypothesisConduct study and collect dataAnalyze dataEvaluate Hypothesis

Thinking Like an Economist7 Principles of EconomicsExplains trends on both large and small scaleMacro / Micro

For each of the following read the definition and consider a real world situation that you can explain to the class.

121 Scarcity Forces TradeoffsScarcity: condition that results because people have limited resources but unlimited wantsTradeoff: exchange one benefit or advantage for another that is thought to be betterLimited resources force people to make choices and face tradeoffs when they choose. No-free-lunch-principle

2 Cost vs. BenefitsPeople choose something when the benefits of doing so are greater than the costs. Benefits: gain something in terms of money, time, experience, etc.Cost-benefit analysisFormally list costs and benefits

COSTSBENEFITSNo time for a good breakfastPleasure of sleeping in longerNo long morning showerLower water billNo study time for tests before schoolMay do better on tests if well restedLess time to dressLess time to worry about what to wearMore likely to be late for classLess likely to fall asleep in classSleeping One Hour Later3Thinking at the marginMost of the decisions made each day involve choices about a little more or a little less of something. Marginal Cost: What you give up to add one more unit to an activity.Marginal Benefit: What you gain by adding one more unit.

4 Incentives matterMotivates a person to take a particular action.People respond to incentives in generally predictable ways.

5 trade makes people better offBy focusing on what we do well and then trading with others, we will end up with more and better choices than by trying to do everything for ourselves.

6 markets coordinate tradeMarkets usually do better than anyone or anything else at coordinating exchanges between buyers and sellers. Market: any arrangement that brings buyers and sellers together to do business with one another.

Invisible hand: individuals pursuit of self-interest can promote the well-being of society as a whole.

7 Future consequences countDecisions made today have future (and often unintended) consequences.

Economic EnigmasEnigma: A puzzle that seems to defy common senseEconomic analysis can explain these crazy thingsWhy does movie theatre popcorn cost more than grocery store popcorn???Why do store sell things for $7.99 and not $8???

EnigmasComplete the worksheet with accompanying visuals in small groups.

TALK and HELP each other

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