Scarcity: The Economic Challenge
Chapter 1:
The Economic Way of Thinking
Section 1:Scarcity:
The Basic Economic Problem
(pg.3-11)
Economics & Scarcity
•
Economics is the study
of how individuals and
societies satisfy their
unlimited wants with
limited resources.
•
Scarcity is the situation
that exists because
wants are unlimited and
resources are limited.
What Is Scarcity????
•
Wants
are desires that can be
satisfied by consuming a good or
service. These are things that you
can live without.
•
Needs
are things such as food,
clothing, and shelter, that are
necessary for survival.
•
People always want more, no matter
how much they have already. In fact,
wants are unlimited, but the
resources available to satisfy them
are limited.
•
The result of the difference is
scarcity
, the situation that exists
when there are not enough
resources to meet human wants.
•
Scarcity
is the fundamental and
ongoing tension that confronts
individuals, businesses,
governments, & societies.
Economics Involves:
1.
Examining
how
individuals, businesses,
and societies choose to
use scarce resources to
satisfy their wants
2.
Organizing, analyzing,
and interpreting data
about those economic
behaviors
3.
Developing theories
and economic laws
that
explain how the
economy works and to
predict what might
happen in the future
Principle’s of Economics
1.
People Have Wants
: Choice is
central to the use of scarce
resources. We have choice
even when it comes to our
needs. For example, when it
comes to food, do we eat
bread & water or do we go to
our favorite restaurant?
2.
Scarcity Affects Everyone
:
wants are unlimited and
resources are scarce, choices
have to be made about how
best to use these resources.
Scarcity, then, affects which
goods are made and which
services are provided.
Goods & Services
Consumers & Producers
•
Goods
are objects, such
as food, clothing, and
furniture, that can be
bought.
•
Services
are work that
one person does for
another.
•
A
consumer
is a person
who buys or uses goods
or services.
•
A
producer
is a maker of
goods or provider of
services.
Scarcity Leads to 3 Economic Questions
1.
What will be produced?
In the
U.S. producers and consumers
decide what is going to be
produced.
2.
How will it be produced?
The
U.S. has a highly skilled work
force, t/f it uses lots of machinery
and few farm workers.
3.
For whom will it be produced?
To
answer this question you have to
answer; exactly how much should
people get and how their share
will be delivered.
4.
Why does the basic problem of
scarcity lead societies to ask the 3
fundamental economic
questions? b/c every society faces
the problem of having too few
resources to meet unlimited
wants.
The Factors of Production
•
These are the economic resources
needed to produce goods and
services.
1.
Land
-this includes all natural
resources found on or under the
ground that are used to produce
goods & services.
2.
Labor
-is all the human time, effort,
and talent that goes into the
making of products.
3.
Capital-
is all the resources made
and used by the people to produce
and distribute goods and services.
4.
Entrepreneurship
-is the
combination of vision, skill,
ingenuity, and willingness to take
risks that is needed to create and
run new businesses.
Economics is the study of how unlimited wants are satisfied with limited resources. Scarcity arises when there are not enough resources to fulfill all human desires, leading to choices on resource allocation. This fundamental issue confronts individuals, businesses, governments, and societies. Economics involves examining how scarce resources are used to satisfy wants, analyzing economic behaviors, and developing theories to explain how economies function and predict future outcomes. Principles of Economics highlight how choice, scarcity, and opportunity cost influence decision-making for individuals and societies. Goods and services play a key role in the exchanges between consumers and producers.
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Presentation Transcript
Chapter 1: The Economic Way of Thinking Section 1:Scarcity: The Basic Economic Problem (pg.3-11)
Economics & Scarcity http://www.stlawu.edu/sites/default/files/page-images/1economics_1.jpg Economics is the study of how individuals and societies satisfy their unlimited wants with limited resources. Scarcity is the situation that exists because wants are unlimited and resources are limited.
What Is Scarcity???? Wants are desires that can be satisfied by consuming a good or service. These are things that you can live without. Needs are things such as food, clothing, and shelter, that are necessary for survival. People always want more, no matter how much they have already. In fact, wants are unlimited, but the resources available to satisfy them are limited. The result of the difference is scarcity, the situation that exists when there are not enough resources to meet human wants. Scarcity is the fundamental and ongoing tension that confronts individuals, businesses, governments, & societies. http://4.bp.blogspot.com/-hxewSAXtpA0/Utcg0r5tjQI/AAAAAAAAAls/MMpSA7QuqxI/s1600/w++n.png
Economics Involves: 1. Examining how individuals, businesses, and societies choose to use scarce resources to satisfy their wants 2. Organizing, analyzing, and interpreting data about those economic behaviors 3. Developing theories and economic laws that explain how the economy works and to predict what might happen in the future http://previews.123rf.com/images/radiantskies/radiantskies1210/radiantskies121000085/15996152-Abstract-word-cloud-for-Economics-with-related-tags-and-terms-Stock-Photo.jpg
Principles of Economics 1. People Have Wants: Choice is central to the use of scarce resources. We have choice even when it comes to our needs. For example, when it comes to food, do we eat bread & water or do we go to our favorite restaurant? Scarcity Affects Everyone: wants are unlimited and resources are scarce, choices have to be made about how best to use these resources. Scarcity, then, affects which goods are made and which services are provided. http://www.duffka.com/_/rsrc/1304101717399/basic-economic-concepts/scarcity-choice-and-opportunity-cost/scarcity_image003.jpg?height=194width=320 2.
Goods & Services Consumers & Producers Goods are objects, such as food, clothing, and furniture, that can be bought. Services are work that one person does for another. A consumer is a person who buys or uses goods or services. A producer is a maker of goods or provider of services. https://blog.richmond.edu/openwidelookinside/files/2009/10/goods-and-services-book-cover.jpg
Scarcity Leads to 3 Economic Questions 1. What will be produced? In the U.S. producers and consumers decide what is going to be produced. How will it be produced? The U.S. has a highly skilled work force, t/f it uses lots of machinery and few farm workers. For whom will it be produced? To answer this question you have to answer; exactly how much should people get and how their share will be delivered. Why does the basic problem of scarcity lead societies to ask the 3 fundamental economic questions? b/c every society faces the problem of having too few resources to meet unlimited wants. http://www.amosweb.com/images/InBs12.gif 2. 3. 4.
The Factors of Production http://www.romeconomics.com/wp-content/uploads/2012/10/factors_of_production.jpg These are the economic resources needed to produce goods and services. Land-this includes all natural resources found on or under the ground that are used to produce goods & services. Labor-is all the human time, effort, and talent that goes into the making of products. Capital-is all the resources made and used by the people to produce and distribute goods and services. Entrepreneurship-is the combination of vision, skill, ingenuity, and willingness to take risks that is needed to create and run new businesses. 1. 2. 3. 4.
