choices, choices, choices,... concept(s): scarcity, opportunity cost, & trade offs skills:...
TRANSCRIPT
Choices, Choices, Choices, . . .Choices, Choices, Choices, . . .
Concept(S):Scarcity, Opportunity Cost, & Trade OffsSkills: Decision Making
Looking at the importance of choice Introduction to three major concepts of
economics:1. Scarcity2. Trade offs3. Opportunity CostYou’ll reflect on all this by end of period with
some questions to consider
What you’ll be doing today…
Your professor first semester in college is
describing her policy on late work. She says you can turn in late work even after the deadline. But, if you turn the assignment in on time, and you don’t like the grade, you can re-submit it for review for a higher grade. If you turn in the work after deadline, and you don’t like the grade you cannot get it reviewed for higher grade.
Would you turn in your work on time? Or submit your work after the deadlines? Explain your thought process
Preamble
Instructions: With a partner, walk around and look at all the items posted on the wall –For every pair of items you see- Answer this question:
“Which do you prefer and why?”Explain to your Jedi partner your reasons for your preference- Jedis you speak firstYou will have 1 min each to discuss with your partner
Choices!
Discussion Questions:What do you gain from your choice?What do you lose from your choice?
Why is choice so important in our daily lives?
Debrief…
Economics – the study of how individuals and
societies make decisions about ways to use scarce resources to fulfill wants and needs.
What does THAT mean?!!??!!
WHAT IS ECONOMICS???
Macroeconomics The big picture:
growth, employment, etc.
Choices made by large groups (like countries)
Microeconomics How do individuals
make economic decisions
The Study of Economics
ALL Societies (we) must figure out
WHAT to produce (make) HOW MUCH to produce (quantity) HOW to Produce it (manufacture) FOR WHOM to Produce (who gets what) WHO gets to make these decisions?
ECONOMICS: 5 Economic Questions
We make choices about how we spend our money, time, and energy so we can fulfill our NEEDS and WANTS.
What are NEEDS and WANTS?
Why Choices?
NEEDS – “stuff” we must have to survive,
generally: food, shelter, water,
WANTS – “stuff” we would really like to have (Fancy food, shelter, clothing, big screen TVs, jewelry, conveniences . . . Also known as LUXURIES
Wants and Needs, Needs and Wants
You can’t have it all (SCARCITY –
remember?) so you have to choose how to spend your money, time, and energy.
These decisions involve picking one thing over all the other
possibilities – a TRADE-OFF!
TRADE-OFFS
Trade-Offs, cont. Chew on This!: What COULD you have
done instead of coming to school today?
These are all Trade-Offs!
A special kind of Trade-Off is an
OPPORTUNITY COST =
The Value of the Next Best Choice
(Ex: Sleeping is the opportunity cost of studying for a test)
Opportunity Costs
I have $12 in my pocket I have $12 in my pocket
Then, what happens to the movies…If I buy a pizza…
Q: What is the opportunity cost of buying pizza?
Several students were talking about taking time off after graduating high school so they could spend two years traveling around the world. One student remarked, “It’s a great idea, but can you imagine how much it would cost? Even if you backpacked and camped out, it would still cost you $10,000!” An economics student replied that the sum of money would not amount to even half the cost. Explain what the economics student is talking about.
*Hint- Review the concepts of scarcity, trade offs, & opportunity cost to respond to this scenario.
What are the students gaining? What are they losing? What are the alternatives (other options)
*Be sure to also underline or highlight the scarce resources, tradeoffs and/or opportunity cost
Practice
Discuss the concept of Outsourcing Introduce the concept of Factors of Production Look at some news coverage and a TV show
called 30 days about the pros and cons of Outsourcing
Our Plan for the day…
Preamble•We are going to watch a promotional video from the garment manufacturing and retail company American Apparel•Things to watch for:1.What makes AA different than other clothing companies?2.Why do you think they have become so popular?
American Apparel Sewing5th Floor AA Sewing
MADE IN THE USA!
Listing ALL FOUR Factors of Production Explain the process of production identifying
all the components (pieces of production)
Wrap Up For the Day Will Be…
PRODUCTION, cont.
Production is how much stuff an individual, business, country, even the WORLD makes.
But what is “STUFF”?
STUFF – Goods and Services.
Goods – tangible (you can touch it) products we can buy
Services – work that is performed for others
4 Factors of Production
LAND
Water, natural gas, oil, trees (all the stuff we find on, in, and under the land
LABOR
Physical and Intellectual
Labor is human power
4 Factors of Production
CAPITAL
- Tools, Machinery, Factories
Human capital is brainpower, ideas, innovation
ENTREPRENEURS
Investment $$$ The risks of investing
Factors of Production – what we need to make goods and services
Producer – company that makes goods and/or delivers services
Consumer – people who buy goods and services (formerly known as “stuff”)
THREE parts to the Production Process
What’s the relationship like?
Production Process
Capital
Labor
Land
Entrepreneurship
Production/Manufacturing“Factory”
Goods
Services
Consumers
Capital Goods & Consumer Goods
Capital Goods: are used to make other goods
Consumer Goods: final products that are purchased directly by the consumer
CHANGES IN PRODUCTION
Division of Labor – different people perform different jobs to achieve greater efficiency (assembly line).
You do your job, and I will
do my Job and we will be more
EFFICIENT
CHANGES IN PRODUCTION Consumption – how
much we buy (Consumer Sovereignty [control])The DELL store is empty because….
Everyone is at the APPLE STORE!!!
Can you identify what problem Dell has in this scenario?
With your jedi partner, take 3 mins to
brainstorm what options does Dell have if the Apple store is as full as seen in the pic before
Let’s bring these out to the floor…Dell can do what lots of American companies have
been doing for quite some time… Outsourcing- The practice of companies sending production to
other countries where materials and labor are cheaper = this reduces costs for companies = can charge less for goods/services… = what choices will consumer make?
Choices that Dell has to make
What outsourcing looks like in
21st centuryCarrier-An American AC/Heater company
Indian manufacturing workers
We Will be watching an episode of the TV
show 30 days by Morgan Spurlock (Supersize Me)
Pay attention to the choices that tech companies have made
How do these choices impact American workers? Indian workers?
What are the trade offs and opportunity costs of outsourcing?
Is outsourcing good or bad for Americans?
Practice with Factors of Production
LandOpen field of grass where the cows graze
Labor-Farmer who milks cows
-Cheese maker
-Packaging
-Delivery
Capital-Milking tools
-Farm
-Containers, etc.
Entr. -Money
-Ideas
-Experience on cow farming and cheese making
List & Describe ALL FOUR Factors of Production Explain the process of production identifying
all the components (pieces of production)(The Three parts of production & the visual) Do you agree or disagree with the practice of
outsourcing? Explain your rationale- Identify and discuss the trade offs and opportunity costs of Outsourcing
Wrap Up For the Day!
Define Scarcity & provide examples Define Trade Offs & provide examples Define Opp Cost & provide examples Explain why and how choice is impacted by all
THREE above List ALL four Factors of Production with example
for each Explain the production process (the diagram) with
the THREE components Discuss how outsourcing works, the trade offs,
and opportunity costs of this business practice
Can you do the following?...