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Economics: Scarcity and Factors of Production

This is my first Prezi! Chapter 1 Section 1 reading notes for high school Economics class.
by

Mike Brooks

on 16 August 2010

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Transcript of Economics: Scarcity and Factors of Production

Scarcity
Factors of Production
Entrepreneurs
What is Economics?
Things that are necessary for survival
Things we desire that are not essential 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...
physical objects
actions or activities that one person performs for another
Eventually, we will have to choose to do one thing...
but not the other.
Shortage
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.
land
labor
capital
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.
physical capital
human capital
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.
Got it?
Concepts
Vocabulary
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.
Important Concept!
What does "scarcity" mean to you?
(A definition and example, if you please.)
Economists look for two conditions to determine if something is scarce:
A situation in which human wants are greater than the capacity of available resources to provide for those wants.
A situation in which a resource has more than one valuable use.
Activity 1
Directions: Work with your desk partner and use the two definitions to decide which situations represent scarcity. Mark accordingly. If it's scarce...Which definition's condition is met? (Def Con 1 or Def Con 2?)
A. Old economics textbooks collected in a bookcase near the teacher's desk with a sign that says "Free books, take as many as you want." The books have been there for three years.
Not Scarce.
B. Old economics textbooks collected in a bookcase near the teacher's desk with a sign that says "Free books, take as many as you want." Another sign posted in the hallway says "$10 paid for any recycled textbook. Bring books to Principal's office."
Scarce!
Def Con 2
C. One economics textbook, five students who wish to do well in the economics course, and an important test in class the next day.
Scarce!
Def Con 1
D. One economics textbook, five students who are not taking an economics course, and an important test in the economics class the next day.
Not Scarce.
E. Petroleum in Japan, a country without its own oil fields and oil reserves.
Scarce!
Def Con 1
F. Petroleum in Saudi Arabia, a country with many oil fields and oil reserves.
Scarce!
Def Con 2
Activity 2
Directions:
Sometimes scarce resources are treated
as if they were not scarce. They're wasted.
Keeping our two definitions in mind,
work with your desk partner to determine if we are wasting scarce resources, or if it's not scarce.
A. Roman Water Fountains...
Scarce resource treated as not scarce.
The water has many other valuable uses, such as irrigation or sewage treatment,
B. Uneaten restaurant food...
Scarce resource treated as not scarce.
The food could feed hungry people; it could be eaten the next day; or it could be composted and used to fertilize gardens.
C. Oxygen in a SCUBA tank...
Scarce, treated as scarce.
There is plenty of oxygen at the surface, but go underwater...
D. Pebbles on the beach
Not scarce.
There are plenty of pebbles around, and nobody has any other valuable uses for them, so they are not scarce.
E. The farmer's irrigation contract
Scarce resource treated as not scarce.
The contract prohibits the farmer from considering any other valuable uses for the water.
Full transcript