Scarcity Worksheet

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Intro to Economics
Scarcity, Choice, and Opportunity
• When a resource is scarce, we must make
 choices between our wants. When we make
 the choice, an opportunity cost is incurred.

• People’s wants are
 resources to fulfill
 are limited.

• Scarcity – the condition in which our wants
  are greater than the resources available to
  satisfy all those wants.

    • Scarcity is not
      created because of
      the shortage of
               Questions for you.
• Can you list some goods that you have found to be
    scarce when you tried to buy them?
•   What happens to the price of goods when they are
•   What happens to your choices when products are
•   Break into groups of two and discuss, and regroup in
    5 minutes. Write your answers on your notes sheet.
Because of Scarcity, choices have to be
• Because of unlimited       • There will always be
    wants and limited            other wants if all the
    resources, scarcity          initial wants are
    occurs.                      fulfilled.
•   When scarcity occurs,    •   We must choose which
    society must make            wants are to be fulfilled
    choices to determine         and which are to be left
    which needs have to be       unsatisfied.
         Choices – Trade Offs

• Trade-offs – alternative economic choices
  consumers make when spending their income
  or time.
• Each economic choice has advantages and
  disadvantages, and some people will make a
  decision-making grid in order to make a
          Types of products.

• Tangible – able to be felt by touch.
• Intangible – not able to be felt by touch.
  Goods, Services, and Consumers
• Free products – products that are free because
  they are so plentiful, such as sunshine or air.
• Economic goods – goods and services that are
  useful, relatively scarce, and transferable to

• Good – a tangible commodity like a book, car,
  or compact disc.
• Consumer good – intended for final use by
• Capital good – a manufactured good used to
  produce other goods and services.

• Durable good – any good that lasts three years
  or more when it is used on a regular basis.
• Nondurable good – an item that lasts for less
  than three years when it is used on a regular

    • Service – work
     that is performed
     for someone.
     Consumers and Consumption

• Consumers – people who use goods and
    services to satisfy wants and needs.
•   Consumption – the process of using up
    goods and services in order to satisfy
    wants and needs.
   Consumers and Consumption

• Conspicuous consumption – the use of a
 good or service to impress others.
            Questions for you.

• Name some products that are bought as
    conspicuous consumption.
•   Have you ever conspicuous consumed?
    What was it?
•   Break into groups of two and discuss, and
    regroup in 5 minutes. Write your answers
    on your notes sheet.
Value, Utility, and Wealth

• Value – something that has a worth that can be
    expressed in dollars and cents.
•   Paradox of value – things that are essential to life
    usually have little value, while those products that are
    not essential to life usually have great value.

• Utility –
 received from the
 use of a good or
   • Wealth – the sum of
     those economic
     products that are
     tangible, scarce, useful,
     and transferable from
     one person to another.
 From Choices to Opportunity Costs.

• With all the different goods and services
 available, you need to decide what you
 are going to buy.
 From Choices to Opportunity Costs.

• When a person has to make a choice
 between two products, an opportunity
 cost is incurred.
From Choices to Opportunity Costs.

                 • Example: Choice to
                   purchase a jacket or an
                   IPOD, both cost the
                   same. If the jacket is
                   purchased, the
                   opportunity cost is the
Factors in Scarcity - Resources
Factors in Scarcity - Resources

                • Land – all the
                 natural resources
                 found in nature.
   Factors in Scarcity - Resources

• Labor – the physical
 and mental talents
 that people
 contribute to the
 production of goods
 and services.
Factors in Scarcity - Resources

                • Capital – produced
                 goods that can be
                 used as resources for
                 further production.
   Factors in Scarcity - Resources
• Entrepreneurship –
  the special talent that
  some people have going
  into business and
  provide new services or
 The monetary payments to resources.

• When someone wants to use resources to
 produce a good, that person must pay money
 to obtain the resource.
  – Rent – payment to a land resource.
  – Wages – payment to labor.
  – Interest – payment to capital.
  – Profits – payment to entrepreneurship.
Worksheet – Resource
Identification/Tony’s Production

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