1.

1 SCARCITY AND THE SCIENCE OF ECONOMICS

If the only pizza restaurant in the area produced 40 pizzas a night and usually sold out quickly, would you be willing to pay more to guarantee that you would get a pizza? A. Definitely B. Possibly C. Definitely not

Name Date Period Questions/Cues Notes: 1-1 Scarcity and the Science of Economics I. Fundamental Economic Problem

The Fundamental Economic Problem

Societies do not have enough productive resources to satisfy everyones wants and needs.

scarcity

Few people are satisfied with the things they have.

The study of how scarcity affects most decisions we make is economics.

A need is necessary for survival. A want is something we would like but not necessary for survival.

The Fundamental Economic Problem

Everything we do has a cost, due to limited resources.

TINSTAAFLThere is no such thing as a free lunch.

Name Date Period Questions/Cues Notes: 1-1 Scarcity and the Science of Economics I. Fundamental Economic Problem Societies do not have enough productive resources to satisfy everyones wants and needs. scarcity

Few people are satisfied with the things they have.

The study of how scarcity affects most decisions we make is economics. A need is necessary for survival.

A want is something we would like but not necessa for survival.

Which do you purchase more often? A. Things you want

B. Things you need

II. Three Basic Questions

Three Basic Questions

Scarcity forces every society to answer the basic questions : What to produce? How to produce?

For whom to produce?

II. Three Basic Questions Scarcity forces every society to answer the basic questions : What to produce? How to produce? For whom to produce? III. Factors of Production

The Factors of Production

Four factors of productionland, capital, labor, and entrepreneursare resources required to produce the things we would like to have.

 Land: Paid for with RENTS Labor: Paid for with a WAGE or SALARY Capital: Paid for with an INTEREST RATE

Business Person/Entrepreneur: Paid for with PROFIT

II. Three Basic Questions Scarcity forces every society to answer the basic questions : What to produce? How to produce? For whom to produce? III. Factors of Production Four factors of productionland, capital, labor, and entrepreneursare resources required to produce the things we would like to have. -Land: Paid for with RENTS -Labor: Paid for with a WAGE or SALARY -Capital: Paid for with an INTEREST RATE -Entrepreneur: Paid for with PROFIT

Which of these do you think is the most important factor of production? A. Land B. Capital C. Entrepreneurs

IV. Scope of Economics

The Scope of Economics

Economics analyzes how societies satisfy wants through careful use of relatively scarce resources. Four key elements to the study of economics

Description
Analysis

Explanation
Prediction

Which of the following does economics describe? A. Jobs B. Taxes C. Government spending

D. All of the above

Name Date Period Questions/Cues Notes: 1-1 Scarcity and the Science of Economics I. Fundamental Economic Problem Societies do not have enough productive resources to satisfy everyones wants and needs. scarcity

Few people are satisfied with the things they have.

The study of how scarcity affects most decisions we make is economics. A need is necessary for survival.

A want is something we would like but not necessa for survival.

II. Three Basic Questions Scarcity forces every society to answer the basic questions : What to produce? How to produce? For whom to produce? III. Factors of Production Four factors of productionland, capital, labor, and entrepreneursare resources required to produce the things we would like to have. - Land: Paid for with RENTS - Labor: Paid for with a WAGE or SALARY - Capital: Paid for with an INTEREST RATE

- Entrepreneur: Paid for with PROFIT

IV. Scope of Economics Economics analyzes how societies satisfy wants through careful use of relatively scarce resources.

Four key elements to the study of economics

Description Analysis Explanation

Prediction