Scarcity: The Basic Economic Problemungerecon.weebly.com/uploads/2/0/8/8/2088048/chapter_1...People...
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Scarcity: The Basic Economic Problem
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Wants:
Needs:
Scarcity:
Economics:
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List 5 wants
List 5 needs
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List 5 wants
Ipod, fast food, car, movie ticket, etc
List 5 needs
Food, water, shelter, clothing, etc
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People have wants We want stuff, lots of it and ever changing
Scarcity affects everyone Even the richest have to deal with scarcity
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Goods: physical objects that can be purchased Give 5 examples of goods
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Services Work that one does for another for payment
Give 5 services
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Producer: a person who makes goods or provides services
Consumer: a person who buys goods or services for personal use
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What will be produced???
Consider natural resources
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How will it be produced??? Machinery, manpower, technology
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For whom will it be produced??? All get equal share?
How much you’re willing to pay?
How will it get to people (transportation)
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FOP: Resources needed to produce goods and services
Economists use resources and factors interchangeably
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1. Land [natural resources] A. In the earth - coal, oil, water, fossil fuels, etc.B. On the earth – vegetation and waterC. In the atmosphere – sun, wind, and rain
“Gifts of Nature”
Water Wind
Sun Fossil fuels
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2. Laboranyone who works [“paid work”]
A. Physical – pro athletes & lumberjacksB. Intellectual – ministers, doctors & lawyers
*Most important resource
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Capital
[tools, machinery, & factories]
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Entrepreneurship: risk taker to start business, put other FOPs together
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Think of something you recently purchased. Write a paragraph that explains how the factors of production were used to create it.