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53 views27 pagesDo Now: - Fresh Water - Highways - Humans With Mathematical Skill
The document outlines key concepts from a business calculus lesson, including:
1. It discusses applying the concept of scarcity to economic and non-economic situations through group work examples like housing prices in San Francisco.
2. It introduces the "8 Ways of Economic Thinking" which are techniques to approach problems economically, with the first letter of each spelling "SCARCITY".
3. It analyzes each of the 8 Ways, such as how scarcity means everything has a cost, choices affect values, and incentives matter in economic decision making.
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0% found this document useful (0 votes)
53 views27 pagesDo Now: - Fresh Water - Highways - Humans With Mathematical Skill
The document outlines key concepts from a business calculus lesson, including:
1. It discusses applying the concept of scarcity to economic and non-economic situations through group work examples like housing prices in San Francisco.
2. It introduces the "8 Ways of Economic Thinking" which are techniques to approach problems economically, with the first letter of each spelling "SCARCITY".
3. It analyzes each of the 8 Ways, such as how scarcity means everything has a cost, choices affect values, and incentives matter in economic decision making.
Uploaded by
wsiepielaCopyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Do Now
Identify which factor of production each of the following items fall
under and describe why they might give rise to scarcity:
• Fresh water
• Highways
• Humans with mathematical skill
Objectives T3, T4, T5
The Economic Way of Thinking
- Business Calculus
Agenda
1. Discuss Do Now (5 minutes)
2. Homework Review (5 minutes)
3. OBJ T3 (25 minutes)
4. OBJ T4 (10 minutes)
5. OBJ T5 (35 minutes)
T3 - Apply the concept of scarcity to
economic and non-economic situations.
Again: Scarcity is the inability to satisfy our
wants due to limited resources.
We briefly discussed questions about the value
of certain things last class. “Are the best things
in life free?” “Is life priceless?”
These are examples of non-economic situations
(if you consider the best things in life family,
friends, etc.).
T3 - Apply the concept of scarcity to
economic and non-economic situations.
Economic situations have to do with things more
commonly thought of as “goods” and “services”.
Scarcity applies in both economic and non-
economic situations. It is one thing to define
scarcity; it is another to be able to see it in
everyday situations.
T3 - Apply the concept of scarcity to
economic and non-economic situations.
Group Work:
When we are ready, we will break up into groups
of 2 (possibly 1 group of 3).
You are going to have 2 minutes for each of the
following situations. Talk with your partner about
what is scarce in each situation and what effects
that scarcity has. Be ready to share your
thoughts with the class.
T3 - Apply the concept of scarcity to
economic and non-economic situations.
Situation 1:
In San Francisco, there is very little room to build
new apartments. Old apartments are crowded
close together for this reason. Kyra goes looking
to rent an apartment, but they are all very
expensive (more expensive than the same
apartment would be in Chicago). Why?
T3 - Apply the concept of scarcity to
economic and non-economic situations.
Situation 2:
There is a drought in Tanzania for several weeks.
It is on the coast, so it has access to the ocean.
Its crops are thirsty for water, so someone
suggests they use the ocean to water the crops.
Why is this more challenging than it seems?
T3 - Apply the concept of scarcity to
economic and non-economic situations.
Situation 3:
Malaria is a deadly disease that affects millions of
people around the world. It is hardly known in
industrialized countries such as the US because
medicines are available to cure it. Why are these
medicines not used elsewhere in the world?
T3 - Apply the concept of scarcity to
economic and non-economic situations.
Situation 4:
Highways are built in the US to facilitate
movement from place to place quickly. If
highways are supposed to be quick, why are they
so slow sometimes?
T3 - Apply the concept of scarcity to
economic and non-economic situations.
Summary:
• In all situations where there are limited,
desirable resources, scarcity applies.
• It is important to look for the application of
scarcity in these cases because it will affect
economic decisions in the future.
T4 - State the “8 Ways of Economic Thinking”.
There are several techniques that will help us
approach problems in an economic way. As we
saw with questions like “Is life priceless?”, there
is a human way of looking at questions, and an
economic way, and sometimes they yield
different answers.
T4 - State the “8 Ways of Economic Thinking”.
The following is a list of “ways” of thinking that
will be used in economics:
1. Scarcity means that everything has a cost.
2. Choices are rational.
3. All economic decisions create secondary effects.
4. Remember: marginal, marginal, marginal!
5. Choices affect values of goods and services.
6. Incentives matter.
7. To influence choices, people create economic
systems.
8. You gain from voluntary trade.
T4 - State the “8 Ways of Economic Thinking”.
1. Scarcity means that everything has a cost.
2. Choices are rational.
3. All economic decisions create secondary effects.
4. Remember: marginal, marginal, marginal!
5. Choices affect values of goods and services.
6. Incentives matter.
7. To influence choices, people create economic
systems.
8. You gain from voluntary trade.
Notice the first letter of each point spells
“SCARCITY”. This is your tool to memorize these
points.
T4 - State the “8 Ways of Economic Thinking”.
Practice these on flash cards. Memorize them.
You will need to be able to state these 8 “Ways”
on an assessment.
T4 - State the “8 Ways of Economic Thinking”.
Summary:
• Be able to “State the 8”.
• These “8 Ways of Economic Thinking” are
going to guide us through the complicated
parts of this course.
T5 - Analyze the “8 Ways of Economic Thinking”.
What does each of the 8 Ways mean?
Knowing the meaning behind something will help
to solidify it in your memory.
Some things we will just touch on here, and then
go more into depth later in the unit.
T5 - Analyze the “8 Ways of Economic Thinking”.
Scarcity means that everything has a cost.
This we have already discussed at length.
Scarcity means that things are desirable and in
limited availability. Therefore, we must sacrifice
something in order to get those limited things if
we really want them.
T5 - Analyze the “8 Ways of Economic Thinking”.
Choices are rational.
When people make a decision, we consider that
decision to be well thought-out in economics. Is
it always? No. But to analyze the decision
mathematically, we need to assume that it is a
rational decision.
T5 - Analyze the “8 Ways of Economic Thinking”.
All economic decisions create secondary effects.
When a decision is made, it affects not only what
it was intended to, but also things that were not
foreseen. Sometimes these “secondary effects”
are positive; sometime negative.
T5 - Analyze the “8 Ways of Economic Thinking”.
Remember: marginal, marginal, marginal!
We will get to marginal thinking in a few classes.
What you need to know now is that marginal
means “on the edge”. What happens when you
take the “very next step”? Everything in
economics is looked at by analyzing the effects
of increasing or decreasing by one unit.
T5 - Analyze the “8 Ways of Economic Thinking”.
Choices affect values of goods and services.
When people make choices, they are making a
statement about the value of the goods or
services they are choosing. By making a
decision, you are essential changing the overall
value of goods and services.
T5 - Analyze the “8 Ways of Economic Thinking”.
Incentives matter.
An incentive is something put in place to
encourage people to decide one way or another.
Incentives have a noticeable affect on decisions
made. They matter!
T5 - Analyze the “8 Ways of Economic Thinking”.
To influence choices, people create economic
systems.
People, usually in nations with governments,
define their economic system to encourage their
people to make certain types of choices.
Ex. US (capitalism) and China (communism)
T5 - Analyze the “8 Ways of Economic Thinking”.
You gain from voluntary trade.
If two parties are exchanging goods or services
voluntarily, they must be gaining from the trade. If
one of the parties was not gaining anything, they
would not be trading. Economic trade is not a
“win-lose” situation.
T5 - Analyze the “8 Ways of Economic Thinking”.
Summary:
• These 8 Ways of Economic Thinking are
“glasses” to look through to see the problems
that face us in an economic light.
• Refer to the list, especially in the beginning, to
see what way(s) of thinking may apply.
Business Calculus
