Scarcity and the Factors of Production (PowerPoint)

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					Scarcity and the



  Factors of
  Production
Scarcity and Choice

 Need- something like food, air,
 shelter, water (necessary for
 survival)
 Want- item we desire—not
 essential to survival
 CANT HAVE EVERYTHING YOU
 NEED OR WANT—YOU HAVE
 TO MAKE CHOICES!!
 Economics- study of how people
 seed to satisfy their needs and
 wants by making choices.
Scarcity

 Goods- physical objects such as
 shoes and shirts, cars, or chairs.
 Services- actions or activities
 that one person performs for
 another… such as haircuts,
 dental checkups, and tutoring.
Scarcity vs. Shortage
 Scarcity- implies limited
 quantities of resources to meet
 unlimited wants.
 ALL GOODS AND SERVICES
 PRODUCED ARE SCARCE.
 Shortage- occurs when
 producers will not or cannot offer
 goods or services at current
 prices.
  Can be long-term or short-term.
  Holiday seasons
  Wars and droughts
Factors of Productions

 Land
 Labor
 Capital
  Physical Capital
  Human Capital
 Entrepreneur
Land

 All natural resources used to
 produce goods and services

 Natural resources are found in
 nature.

 Can include farmland, products on
 the land (coal, water, forests).
Labor

 The effort that a person devotes
 to a task for which that person is
 paid.
 Can include medical aid provided
 by a doctor, a painting created by
 an artist, or the repair of a TV.
Capital
 Any human-made resource that is
 used to produce other goods and
 services.

 Physical Capital- Human-made
 objects used to create other goods
 and services (capital goods).
  Buildings
  Tools (tractors, pencils, etc.)
 Human Capital- knowledge and
 skills a worker gains through
 education and experience.
Physical Capital Benefits


Extra time
More knowledge
More productivity
Entrepreneur

 Ambitious leaders who decide how
 to combine land, labor, and capital
 resources to create new goods and
 services.

				
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posted:9/7/2011
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