Introduction to Economics

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8th Grade Economics
Chapter 1 Introduction to Economics
Cardinals!
2
8th Grade Economics
Section I
Cardinals!
3
Objectives

• Research and compare needs and wants of developed
  and less developed countries
• Compare needs and wants at the individual, family
  and government levels

Chapter 1
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Economics
The study of how individual, families, businesses
and society use limited resources to satisfy
their needs and wants by making choices.
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Individual Needs

• What are individual needs?
• Necessary for survival
• Cultures ideas differ
• Developed countries
• Less Developed

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Individual Wants

• What are individual wants?
• An item we desire however not essential for
  survival

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Needs Comparison

• Developed
• Air
• Water
• Shelter
• Food
• Hygienic products
• Clothes
• Gas
• Transportation
• Electricity
• Education

• Developing
• Water - bucket
• Air
• Shelter sticks,mud, leaves
• Food
• Weapons
• Hand tools

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Wants Comparison

• Developed
• Games
• Bottled water
• Firearms
• New and improved
• High dollar cars
• Fashion clothes
• Limited to our imagination

• Developing
• Indoor pluming
• Building material (wood, metal, brick)
• Electricity
• Firearms
• Personal hygienic products
• Animals
• Education
• Medicine

A choice!
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Government Needs and Wants

• Needs
• Strong military
• Infrastructure
• Education
• Cabinets

• Wants
• New equipment
• No pot holes
• New territory

A choice!
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Shelby County Needs and Wants

• Needs
• Texts books
• Technology
• Faculty
• Athletics

• Wants
• Latest and greatest technology
• New textbook
• A/C

A choice!
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Trade-offs
Refers to losing quality or an aspect of
something in return for gaining another quality
or aspect. It requires a decision to be made with
full comprehension of both the good and bad.
A choice!
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Opportunity Cost

• The cost of an alternative that must be forgone
  in order to pursue a certain action. Put another
  way, the benefits you could have received by
  taking an alternative action.

• Personal
• Advance schooling vs work force
• Going to the movies vs studying

• Business
• Employees vs technology
• Store front vs internet

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Scarcity
Means that people do not have and cannot have
enough income and time to satisfy their every
want.
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Scarcity
Unlimited wants
Limited resources
Scarcity
Choices
What to produce
How to produce
For whom to produce
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Whos Buy and Selling?

• ???

• ???

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Whos Buy and Selling?

• Consumer
• An individual or organization who purchases a
  good or a service
• They make the choices of needs and wants or
  evaluate the trade off risk or potential

• Producer
• An individual who makes and sells a good or a
  service to a consumer
• Forces consumers to make the difficult choices
  of needs and wants

• Standards of living the quality of life based
  on the possession of the necessities and luxuries
  that make life easier

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Economic Questions???

• What to produce
• A new good or service
• Improve a good or service
• Sell someone else goods or service

• Goods
• An item that is economically useful or satisfies
  an economic want.
• Books
• Cars

• Service
• The use of a person or organization for their
  skill or abilities.
• Barber
• Doctor
• Chief
• Teacher

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What to Produce?

• Business???
• Homes
• House hold Appliances, furniture, bedroom,
  kitchen
• Clothing sports apparel or seasonal,
• Entertainment
• Technology always updating
• Personal items age, gender, or ethnic
• Governments??
• Healthcare
• Military education
• Transportation

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What to Produce?

• Individual
• Entrepreneur
• Farm
• Worker

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How to Produce?

• Mass production with equipment and few workers.
• Lower production less equipment and more
  employees.
• Local or outsource.

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For Whom to Produce?

• Military?
• Population? (which class?)
• Government?

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8th Grade Economics
Section II
Cardinals!
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Factors of Production

• Land (water) gifts of nature every thing our
  earth naturally provides soil, forest, fish,
  minerals, animals

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Factors of Production

• Labor the work people do that produces a good
  or service

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Factors of Production

• Capital the tools, equipment, machines, and
  factories used in the production of goods and
  services.
• Physical capital are the concrete goods of
  capital
• Financial capital the money used to buy the
  tools and equipment used in production
• Human capital skills, abilities and motivation
  of employees

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Factors of Production

• Entrepreneurship an individual that starts a
  new business, to introduce new goods or services.

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Tomorrows Addition

• Technology any use of land, labor and capital
  that produced goods and services more efficiently

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The Outcome
Production The process of creating goods and
services.
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Value

• Refers to the worth that can be expressed in
  dollars and cents.

What determines value
Scarcity
Production
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Utility

• To have value a good or service must have
  Utility, the capacity to be useful and provide
  satisfaction.

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Wealth

• Goods that are scarce, useful and transferable to
  one person to another.

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The Circular Flow of Economic Activity
Consumer Spending
Product Markets


Business Income
Goods Services
Goods Services
Businesses
Individuals
Land Capital Labor Entrepreneurs
Buy Productive Resources


Factors Markets
Payment for Resources
Income from Resources
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Goods

• Durable last longer than three (3) years
• Cars
• Books
• Furniture
• Non-Durable last less than three (3) years
• Shoes
• Clothes
• Newspapers

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Division of Labor

• Employees do fewer task during the work day. The
  more task a worker does, the less efficient they
  are at any one task.
• Hazard of this concept???

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Specialization

• Takes place when factors of production perform
  tasks that they can do relatively more
  efficiently than others.
• Labor I teach your social studies. Mrs. Rash
  teaches LA.
• Land corn belt, political, potatoes
• Capital robot welders vs. forklifts

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8th Grade Economics
Section IV
Cardinals!
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Stock Market

• A private or public market for the trading of
  company stocks at an agreed price
• Bull Market A tend of increased investor
  confidence, motivating investors to buy in
  anticipation of further capital gains. The
  longest and most famous bull market was in the
  1990s when the U.S.
• Bear Market is described as
• being accompanied by
• widespread pessimism.
• Investors anticipating further
• losses are motivated to sell

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The Investment Game

• Individual Stocks When you as an investor
  personally buy shares of a company in hopes that
  the company will expand its financial capital
• Mutual funds When you as an investor give your
  money to an investment firm which they use to
  invest in company or companies.

Chapter 1