Warm-Ups

Warm-up One:

What does scarcity mean?

Something is scarce when it is desirable and limited. Scarcity occurs because people have unlimited wants, but limited resources to satisfy those wants.

What is the opportunity cost of taking an all expense Hawaii Vacation for Spring Break?

Opportunity cost is the "next best thing" that is given up when a decision is made. In this scenario, the opportunity cost could be a vacation with your family instead.

Identify the Normative Statement

1. Inflation is not good for the economy
2. Low unemployment is a good thing
3. The government should pay for all junior college education
   

A positive statement has a definite, factual answer, and frequently features the word "is."

A normative statement does not have a definite answer, factual answer, and frequently features the word "should."

The normative statement is: The government should pay for all junior college education.

What is the labor force of the U.S. composed of?

The labor force is composed of the sum of those who are employed and unemployed. Or, in other words, those who are working for pay, and those who are looking for a job.

It excludes active duty, underaged, and those who are not seeking employment.

What does the business cycle illustrate for the U.S.?

The business cycle illustrates the movement of the economy, following its expansions, contractions (recessions), troughs, and peaks.

Warm-up Two:
Illustrate the circular flow of economic activity accurately. Explain the two markets within the economy and what each is doing.

Resource Markets:
Scarce resources owned and provided by consumers. They feature the Factors of Production: Capital, Entrepreneurship, Land, and Labor. It provides the resources for producers to produce goods and services.

Goods and Services
Provides the resources for consumers to produce the factors of production.

Warm-up Three:

Write a one page response summarizing a real-life event where you were in an economic situation. Be sure to highlight each of the lessons and how they played out in your real-life situation.

I had to find a solution for storing our family photos and videos. The primary scarcities were cost and time.

For this, I had two main choices: Use an existing online service, or to build my own local solution.

An online service required little time, but a great amount of monetary cost.
A local solution required a great amount of time, but far less monetary cost.

I ultimately went with the local solution, having the opportunity cost of time that could’ve been spent on other productive activities such as enjoying my winter break (which was at the time).

Warm-up Four:

What are the key economic concepts displayed in a PPC or PPF?

Scarcity, opportunity costs, trade-offs, and efficiency.

What does an outward shift of the curve represent?

Economic growth.

What does an inward shift of the curve represent?

Economic recession.

What does a point inside the curve represent?

Inefficient production.

Is a point outside of the curve possible under current circumstances?

No, because it is considered infeasible.

Warm-up Five:

What are the factors that would cause the demand curve to shift to the left for sweatshirts?

Consumer income (decreases), consumer tastes (decreases), substitutes (other decreases), number of consumers (decreases), complementary goods (other increases in price), price (decreases), and future expectations (future price increases).

If an increase in the price of gasoline results in a decrease in the demand for car tune-ups; what can we assume about the two goods and services?

They are complementary goods.

Assuming pizza is a normal good, an increase in income will do what to the demand for pizza?

The demand will increase because demand for normal goods are proportional to income.

If an increase in the price of string cheese leads to an increase in the demand for cheese sticks, what can we assume about the two products and which way would the demand curve shift for cheese sticks?

We can assume these products are supplementary, and the cheese sticks will shift towards the left.

When lumber costs fall, what happens to the supply of new construction? 

The supply will increase due to a reduction in I: Input costs for producer.

A flood on the Oxnard Plain destroys the strawberry crop. What will happen to the supply of strawberries and what will happen to the price of strawberries at the market?

Supply will decrease due to W: Catastrophic weather event. The price will increase.

Draw a graph representing the market for semiconductors in the United States and show what happens when the government imposes a quota on imported semiconductors from Taiwan.

The supply curve will shift towards the left as supply decreases.

Draw a graph representing the market for electric cars in California and show what happens when a new technology reduces the cost of battery production. 

The supply curve will shift towards the right as supply increases.

Warm-up Seven:

1. Who buys in the product market? What are they buying?

Households buy from the product market. They buy goods and services.

2. Who sells in the product market? What are they selling? What is their income called?

Firms sells in the product market. They sell goods and services. Their income is called revenue.

3. Who buys in the factor market? What are they buying?

Firms buy in the factor market. They buy the factors of production (land, labor, capital, and entrepreneurship). 

4. Who sells in the factor market? What are they selling? What is their income called?

Households sells in the factor market. They sell the factors of production (land, labor, capital, and entrepreneurship). Their income is called wages and rent.

Money is always clockwise (on the inside). Factors and services will always be moving counterclockwise.