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Economics: Scarcity, Trade-offs and Factors of Production
Transcript of Economics: Scarcity, Trade-offs and Factors of Production
Factors of Production
What is Economics?
Things that are necessary for survival
Things we desire that are not esssential to survival.
The study of how people seek to satisfy their needs and wants by making choices.
All of the goods and services we produce are scarce.
We have unlimited wants
and limited resources.
actions or activities that one person performs for another
Eventually, we will have to choose to do one thing...
but not the other.
is not Scarcity
is a fact of life
Shortage occurs when producers can not, or will not, offer goods or services at the current prices.
all natural resources used to produce goods and services. Natural resources are materials found in nature. They include fertile land for farming and products that are in or on the land, such as coal, water, and forests.
is the effort a person devotes to a task for which that person is paid.
Human-made objects used to create other goods and services
the knowledge and skills a worker gains through education and experience
Both types of capital are essential to produce goods and services.
are ambitious leaders who decide how to combine land, labor, and capital resources to create new goods and services.
They are the individuals who take risks to develop original ideas, start businesses, create new industries, and fuel economic growth.
Think like an economist...
What explanation would an economist give for why each of these statements is true?
1. People must make choices to satisfy their needs and wants.
2. Scarcity always exists
3. Physical capital is an important factor of production
4. All goods and services are scarce.
5. Entrepreneurs are important to the production of goods and services.
1. An MP3 player is a _______ rather than a need because it is not necessary to survival.
Just fill in the blank...
2. The study of how people meet their needs and wants by making choices is __________.
3. Persons who perform such actions as cutting hair or teaching school are providing _________
4. When producers will not, or can not, provide goods or services at current prices, a _________ occurs.
5. Land, labor, and capital make up the ________.
6.When people make resources for producing other goods and services, they are creating _________
7. The term ________ refers to water, forests, and all other natural resources used to produce goods and services.
8. Two categories of capital are physical and __________.
9. Factories, machinery, and pencils are all examples of _______ capital.