Scarcity and the Factors of Production In this
- Slides: 15
Scarcity and the Factors of Production In this lesson, students will be able to define the following key concepts: Scarcity Economics The Factors of Production Entrepreneur
Do Now: 1/29/20 • What does every choice come with?
In a magical world, there is no need for Economics but we live in a world of Scarcity. We need Economics.
Do Now: 1/29/20 What does every choice come with?
Scarcity • Scarcity is the realization that our wants and desires are unlimited but the world’s natural resources are limited. • In other words, we always want more than we have. • We cannot wave a magic wand to get everything we desire.
Wouldn’t it be nice if we could just wave the magic wand multiply our dollars?
Economics • Due to scarcity, we cannot have everything we want or need. Therefore, we have to make choices. • Economics is the study of the choices we make.
Which will you choose in a world of limited resources?
The Factors of Production • Whenever we make a good (an object) or a service (an action performed), we need the Factors of Production. • The Factors of Production are: Land ( Natural Resources) Labor (Paid Workers) Capital (Money and Machines)
The Factors of Production • In order to make a good or service, it is necessary to have the factors of production. • Land refers to natural resources; labor refers to paid workers; capital is any human-made resource that is used to create other goods and services.
Name the Factor of Production addressed in this diagram.
Entrepreneur • An entrepreneur is a person who puts together land, labor, and capital to make new businesses. • If your mother opened her own business, she is an entrepreneur. • Bill Gates is also an entrepreneur.
Entrepreneur • An entrepreneur is an ambitious leader who combines land, labor, and capital to create and market new goods and services. • The entrepreneur combines the factors of production to create new businesses.
Questions for Reflection: • • Explain how scarcity affects your daily life. Why does Economics exist? Describe the Factors of Production. Do you want to be an entrepreneur? Explain your answer.