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Scarcity and the Science of Economics

Scarcity and the Science of Economics. Economics The study of how people try to satisfy unlimited and competing wants through the careful use of scarce resources. 1-What is the fundamental economic problem facing all societies? Scarcity. Textbook definition

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Scarcity and the Science of Economics

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  1. Scarcity and the Science of Economics

  2. Economics The study of how people try to satisfy unlimited and competing wants through the careful use of scarce resources

  3. 1-What is the fundamental economic problem facing all societies? Scarcity

  4. Textbook definition Scarcity: the condition that results from society not having enough resources to produce all the things people would like to have.

  5. 2-What is a NEED? A basic requirement for survival Provide 3 examples. 1- Food 2- Clothing 3- Shelter

  6. 3-What is a WANT? Provide 3 examples of things YOU want. Something we would like to have, but is not necessary for survival Examples: 1- ? 2-? 3-?

  7. 4-What do the letters TINSTAAFL stand for and what does it mean? There Is No Such Thing As A Free Lunch Most things in life are not free because someone has to pay for the production in the first place Because resources are limited, everything has a cost.

  8. 5-What are the three basic questions societies have to answer about the way resources are used? Provide examples for all three. 1-  What to produce: Where should society direct most of its scarce resources? Military; Food; Housing. A society cannot have everything its people wants: limited resources. 2- How to produce: Automated production methods or more workers? 3-For whom to produce: Who will receive the things produces? Housing for the poor, the middle class, the wealthy?

  9. Factors of production Resources required to produce the things we would like to have.

  10.  6-List and define the four factors of production. 1- Land: natural resources-deserts, mineral deposits, fertile fields, climate to grow crops. 2-Capital: Tools, equipment, machinery and factories used in the production of goods and services. A bulldozer used in the construction of house; Computers used to write books…. 3- Labor: workers used in the production of goods and services 4- Entrepreneurs: a risk-taker in search of profits who uses the factors of production [resources] to create new businesses or bring new products to the market.

  11. Name The Factor of Production 1-The tools you own 2-The area in your yard where you plant vegetables 3-The lawn mower you use to cut grass. 4-Gasoline purchased to run the lawn mower 5-The effort you exert in tending your garden 6-The water and fertilizer used in your garden 7-The organizational skills you possess and use in the operation of your business to sell the vegetables you grow

  12. Name The Factor of Production 1-The tools you own Capital 2-The area in your yard where you plant vegetables Land 3-The lawn mower you use to cut grass. Capital 4-Gasoline purchased to run the lawn mower Land 5-The effort you exert in tending your garden Labor 6-The water and fertilizer used in your garden Land 7-The organizational skills you possess and use in the operation of your business to sell the vegetables you grow Entrepreneurship

  13. 7-What are the four key elements of the study of economics? Explain why each one is important. 1-Description: we need to know what the world around us looks like: economic activity. Gross domestic product [GDP]: the dollar value of all final goods and services within a country’s borders in a 1 year period. GDP is the most comprehensive measure of a country’s total output and a key measure of the country’s economic health.

  14. 7-What are the four key elements of the study of economics? Explain why each one is important. 2-Analysis: Why things work and how things happen: prices, incomes, taxes. 3-Explanation: A common understanding of the way our economy works; makes it easier to explain economic problems and how to fix the. 4-Prediction: To predict what might happen in the future and the effects of different economic actions

  15. Textbook definition Scarcity: the condition that results from society not having enough resources to produce all the things people would like to have. Write this down: In order for a good or service to be considered scarce it must meet both criteria: Scarcity Formula 1-It must me limited or finite 2-It must be desired

  16. In order for a good or service to be considered scarce it must meet both criteria: 1-It must me limited or finite 2-It must be desired Use this formula and determine which of the 11 items are “Scarce” or “Not Scarce”

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