DRILL What are three termsconcepts that are associated

DRILL �What are three terms/concepts that are associated with Economics?

What Economics is All About?

What Economics is All About? �Economics is the study of how people, choose to use scarce resources to satisfy their unlimited wants.

SUPER BOWL �Are there enough tickets to meet the demand of everyone who would like to go to the Super Bowl game? � • What is the relationship between wants, and resources?

The foundation of economics is based on two facts: (1) People’s wants are unlimited (2) The resources needed to meet these wants ARE limited.

Scarcity Condition that results from unlimited wants and limited resources

Scarcity

Limited Resources Land

Capital Resources �Any good that is used to produce other goods and services

Entrepreneurship �A risk taker who opens their own business in seek of a profit

Land (Natural) Resources �Things found in nature

Labor (Human) Resources �People using their skills to do mental and physical work

Review Resource Land Capital Resources Entrepreneurship Labor (Human) Resources Description

Opportunity Cost OR

Resources are used to produce Goods and Services but since…. Resources are LIMITED choices must be made and opportunity costs occur

Opportunity Cost �The value of what is given up when a choice is made. OR

Choices must be made and Opportunity Cost incurred to answer Three Basic Questions 1. WHAT 2. HOW 3. TO WHOM goods and services will be produced? will the goods and services be distributed?

This creates the need for an ECONOMIC SYSTEM Command Traditional Market MIXED which is how people obtain goods and services.

Review - Factors of Production ____________ • Goods made by people that are used to produce other goods and services • Can be used over and over again • Found in earth • Payment must be necessary for its use Factors of Production ___________ • People using their skills and talents to do mental and physical work ___________ • Person who takes risks in business • Hopes to make a profit