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Scarcity

Scarcity . Chapter 1.1. Needs vs. Wants. Needs - basic necessities Wants - the desires people have Economists study- how people meet their needs and wants by how they make choices. Goods and Services. Goods - objects that we buy Services - activities performed by one person for another.

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Scarcity

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  1. Scarcity Chapter 1.1

  2. Needs vs. Wants • Needs- basic necessities • Wants- the desires people have • Economists study- how people meet their needs and wants by how they make choices

  3. Goods and Services • Goods- objects that we buy • Services- activities performed by one person for another

  4. Scarcity vs. Shortage • Scarcity- ongoing condition because resources are limited (always exists) • Shortage- short term condition created by demand • Goods/Services are scarce…because resources needed to produce them are scarce. Our wants and needs are greater than the resources we use to produce our goods and services. Our wants and needs are produced from resources that are scarce.

  5. Factors of Production • Definition- the resources used to produce the goods and services to meet the demands of our wants and needs • Land- natural resources, space to put our buildings, etc. • Labor- the work by people to produce goods and services • Capital- human made resource that is used to produce other goods and services

  6. Types of Capital • Physical- human made objects used to create goods and services (save people money and time). • Human- skills people gain through education and experience

  7. FOP (cont.) • **** Goods and Services are scarce because the FOP are scarce • Entrepreneurs- people who decide how the FOP are to be used in creating goods and services • ECONOMICS- the study of how people use the FOP to meet their needs and wants

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