Current Events:
The Seen & Unseen of Government Regulation: Bastiat
In class assignment for today (email or hand in with your HW):
Who was Bastiat?
What example does he describe?
What did he mean by the "seen and unseen" of economics?
What affect does government regulation have on small business? Good or bad?
Chapter 1: What Is Economics?
I had asked yesterday for the terms to be defined for the Student Web Activity:
human capital
trade-offs
opportunity cost
Chapter Overview
Section 1: Scarcity and the Science of Economics
Economics is a social science that deals with the fundamental economic problem of scarcity—a condition caused by the combination of seemingly unlimited wants and limited resources. Because of this, people are forced to make choices and decisions about how they will use their resources. People have needs such as food, clothing, and shelter; people have wants, which are nonessential ways of expressing needs. The notion of TINSTAAFL, which stands for There Is No Such Thing As A Free Lunch, is often used to remind us that resources are scarce and that we must make careful economic decisions regarding WHAT, HOW, and FOR WHOM to produce. Other concepts relevant to economics are the four factors of production: land, capital, labor, and entrepreneurs. And the four key elements to this study are description, analysis, explanation, and prediction.
Scarcity
This is an excellent illustration for your notebook.
Scarcity & Choice (Shhh, if the volume is too low), 4:36
In-class assignment for today:
According to the video, what is Economics? What is scarcity? Can you provide an example of a choice that is not rational nor is it in your self-interest?
Definition of Economics
The Factors of Production, p. 8
Graphic Organizer: Chapter 1, Section 1 - Review, The (4) Factors of Production, p. 8
Land
Capital
Labor
Entrepreneurs, p. 9
A good is said to be an economic good (also known as a scarce good) if the quantity of the good demanded exceeds the quantity supplied at a zero price. In other words, a good is an economic good if people want more of it than would be available if the good were available for free.
A good is said to be a free good if the quantity of the good supplied exceeds the quantity demanded at a zero price. In other words, a good is a free good if there is more than enough available for everyone even when the good is free. Economists argue that there are relatively few, if any, free goods.
An item is said to be an economic bad if people are willing to pay to avoid the item. Examples of economic "bads" include things like garbage, pollution, and illness.
Goods that are used to produce other goods or services are called economic resources (and are also known as inputs or factors of production). These resources are often categorized into the following groups:
1. Land,
2. Labor,
3. Capital, and
4. Entrepreneurial ability.
The category of "land" includes all natural resources. These natural resources include the land itself, as well as any minerals, oil deposits, timber, or water that exists on or below the ground. This category is sometimes described as including only the "free gifts of nature," those resources that exist independent of human action.
The labor input consists of the physical and intellectual services provided by human beings. The resource called "capital" consists of the machinery and equipment used to produce output. Note that the use of the term "capital" differs from the everyday use of this term. Stocks, bonds, and other financial assets are not capital under this definition of the term.
Entrepreneurial ability refers to the ability to organize production and bear risks.
The resource payment associated with each resource is listed in the table below:
Economic Resource Resource Payment
land rent
labor wages
capital interest
entrepreneurial ability profit
And, again here below:
Web Activity Lesson Plans
The Student Web Activity is based on the class lesson. For example, students should look up and define these three terms before the Activity begins:
human capital
trade-offs
opportunity cost
Terms defined:
Chapter 1: What Is Economics?
Student Web Activity
"Learning About an Occupation"
Introduction
The freedom to make our own economic decisions, including our occupations, employers, and when and where we work, is one of our most cherished freedoms. Information available on the World Wide Web makes these choices increasingly easier to explore. One useful source is the Occupational Outlook Handbook from the U.S. Bureau of Labor Statistics. It has detailed information on hundreds of occupations—from "able seamen" to "zoologists"—including job descriptions, earnings, job outlooks, and educational requirements. It is never too early to think about an occupation. The Handbook may even help you to decide which courses you want to take before you graduate. One occupation you might want to consider is that of an economist. Economists have one of the higher paying jobs in the economy and it's a career worth considering.
The class will be divided into four groups and one of the questions below will eventually be your group question. Your group is expected to find a suggested answer to each of the four questions, and then your group will answer one question for the entire class.
Think of your own individual answer to these questions: this is your HW for tonight:
1. Read the description under "Nature of the Work." Then, describe several aspects of the job that appeal to you.
2. If you were to decide to become an economist, what other academic disciplines would you have to study in college? Why is this so?
3. Where do economists find employment, and what salaries can economists expect to make?
4. What are the opportunity costs that you are likely to encounter if you decide to become an economist?
Textbook site:
Economics: Principles and Practices
Economics Web Links
Games & Simulations
Stock Market Game (SMG)
"Student teams are $15 each."
Mankiw Macroeconomics Presidential Game
Please note: this game requires the Shockwave version 7.0 or higher: test page for Shockwave.
There is an abundance of economics resources for Mankiw (edition 5e) as well.
References
Textbook site:
Economics: Principles and Practices
Economics Web Links
Games & Simulations
National Geographic MapMachine and maps to illustrate areas.
Study-to-Go: download a portable version of your textbook-related materials onto your Palm or Pocket PC, including Self-Check Quizzes.
ECONOMY WATCH
This Index page collects all of the stories that we have written about the nation’s economic and financial crisis.
Cf. http://blog.glencoe.com/blog/2010/08/25/economy-watch/
Cf. Scarcity
Energy Crisis: Resource Scarcity, Oil Wars & Climate Change, 1:25:18
Participants: George Soros; Mary Kaldor; Yahia Said; Sir Nicholas Stern. Chaired by Howard Davies
Description: This event seeks to promote their political agenda and thinking about energy security, and marks the launch of the publication Oil Wars, edited by Mary Kaldor, Terry Karl and Yahia Said.
July 4, 2007 at the London School of Economics.
(Audio only unfortunately)
HW
Email me at gmsmith@shanahan.org, or in a hard copy hand in.
These questions are the four we covered in class today.
1. Read the description under "Nature of the Work." Then, describe several aspects of the job that appeal to you.
2. If you were to decide to become an economist, what other academic disciplines would you have to study in college? Why is this so?
3. Where do economists find employment, and what salaries can economists expect to make?
4. What are the opportunity costs that you are likely to encounter if you decide to become an economist?
