Scarcity and the Study of Economics by yurtgc548


									Scarcity and the Study
of Economics
   We witness scarcity with each
    year’s “hot” new toy. Inspired
    by hunter President Teddy
    Roosevelt, Americans coveted
    the teddy bear in 1906.
    Cabbage Patch dolls were big
    during the 1980s, as were
    Tickle Me Elmos in 1996. By
    1999 Game Boy’s Pokémon
    was the rage with a 10-cent
    trading card. The most-prized
    first-edition pocket monsters
    were in such short supply that
    they commanded from $8 to
The Fundamental
Economic Problem
   Scarcity is the condition where unlimited
    human wants face limited resources.
   Economics is the study of how people
    satisfy wants with scarce resources.
   Needs are required for survival; wants are
    desired for satisfaction.

   Someone has to pay for production
    costs, so There Is No Such Thing As A
    Free Lunch.
   Why do you think
    scarcity is an issue
    with the rich as well
    as the poor?
   It is a human trait
    that few people,
    regardless of their
    economic status,
    are satisfied with
    what they have.
Three Basic Questions

   1. What must we produce?
   2. How should we produce it?
   3. For whom should we produce?
The Factors of Production

   Factors of production are resources
    necessary to produce what people want or
   1. Land is the society’s limited natural
   2. Capital is the means by which something
    is produced such as money, tools,
    equipment, machinery, and factories.
   3. Labor is the workers who apply
    their efforts, abilities, and skills to
   4. Entrepreneurs are risk-takers who
    combine the land, labor, and capital
    into new products.
   Why are entrepreneurs an economy’s
    driving force?
   Their abilities to start new businesses
    and introduce new products may re-
    energize a sluggish economy or
    strengthen a successful economy.

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