Study of the choices people make when faced

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Study of the choices people make when faced with scarcity

Study of the choices people make when faced with scarcity

scarcity Unlimited wants with limited resources

scarcity Unlimited wants with limited resources

What is scarce ? ANYTHING YOU DO NOT HAVE!!!

What is scarce ? ANYTHING YOU DO NOT HAVE!!!

AGREE OR DISAGREE? Resources are “scarce”. There are not enough.

AGREE OR DISAGREE? Resources are “scarce”. There are not enough.

RESOURCES ARE SCARCE

RESOURCES ARE SCARCE

Needs vs. Wants survival Water Food Shelter Clothing like or desire Coke Pizza Hut

Needs vs. Wants survival Water Food Shelter Clothing like or desire Coke Pizza Hut mansion Abercrombie

Need or Want? • • Chocolate milk Milk for a newborn baby Hairspray Toothpaste

Need or Want? • • Chocolate milk Milk for a newborn baby Hairspray Toothpaste Shelter during winter Car Ipod water

3 Basic Economic Questions 1. What to produce? 2. How to produce? 3. For

3 Basic Economic Questions 1. What to produce? 2. How to produce? 3. For Whom to produce?

Factors of Production • What went into making this?

Factors of Production • What went into making this?

What went into this? Rubber (from Malaysia) machines metal Someone who put all of

What went into this? Rubber (from Malaysia) machines metal Someone who put all of this together. wood graphite

4 Categories of Productive Resources (Factors of Production) LAND LABOR - Natural, renewable resources

4 Categories of Productive Resources (Factors of Production) LAND LABOR - Natural, renewable resources - Human resources, people -wood, rubber, graphite, land, animals -MENTAL and PHYSICAL CAPITAL - A produced good used in the prduction of another good -Machines, computers, buildings, etc ENTREPRENUERSHIP -The person or group responsible for putting the other 3 together to produce something

Factors of Production 1. Land: includes not only property on which a production plant

Factors of Production 1. Land: includes not only property on which a production plant is built, but all other natural resources. (land, forests, water resources, oil) 2. Labor: is the contribution of human workers to the production process. (school teachers, janitors)

Factors of Production 3. Capital: refers to all the structures and equipment involved in

Factors of Production 3. Capital: refers to all the structures and equipment involved in the manufacturing process. (machinery storage, transportation) 4. Entrepreneurship: is a specific form of labor. A risk -taker in search of profits who does something new with existing resources.

Natural Resources: Human Resources List examples Draw picture to represent Think of a product

Natural Resources: Human Resources List examples Draw picture to represent Think of a product Capital Resources Entrepreneurship List examples Draw picture to represent

How are scarce resources allocated? • Our economic system allocates resources by price.

How are scarce resources allocated? • Our economic system allocates resources by price.