Unit 1
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Unit 1.1 Scarcity
LEARNING OBJECTIVE:
Define scarcity and economic resources.
Unit 1.2 Opportunity Costs and PPC
LEARNING OBJECTIVE:
a. Define (using graphs as appropriate) the PPC and related terms.
b. Explain (using graphs as appropriate) how the PPC illustrates opportunity costs,
tradeoffs, inefficiency, efficiency, and economic growth or contraction under
various conditions.
c. Calculate (using data from PPCs or tables as appropriate) opportunity cost.
Unit 1.3 Comparative Advantage and Gains from Trade
LEARNING OBJECTIVE:
a. Define absolute advantage and comparative advantage.
b. Determine (using data from PPCs or tables as appropriate) absolute and
comparative advantage.
Unit 1.4 Demand
LEARNING OBJECTIVE:
a. Define (using graphs as appropriate) the law of demand.
b. Explain (using graphs as appropriate) the relationship between the price of a good
or service and the quantity demanded.
Unit 1.5 Supply
LEARNING OBJECTIVE:
a. Define (using graphs as appropriate) the law of supply.
b. Explain (using graphs as appropriate) the relationship between the price of a good or service and the quantity supplied.
Unit 1.6 Market Equilibrium, Disequilibrium,
and Changes in Equilibrium
LEARNING OBJECTIVE:
Define (using graphs as appropriate) market equilibrium.
a. Define a surplus and shortage.
b. Explain (using graphs as appropriate) how prices adjust to restore equilibrium in
markets that are experiencing imbalances.
c. Calculate (using graphs as appropriate) the surplus or shortage in the market
experience an imbalance.
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How We Spend Money.
Why government spending is so wasteful!
“There are four ways you can spend money.
You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money.
You can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost.
You can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch!
Finally, You can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get, that’s government.
That’s close to 40% of our national income. [Fox News interview in May 2004]”
― Milton Friedman
