Scarcity and the
Scarcity and Choice
Need- something like food, air,
shelter, water (necessary for
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.
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
ALL GOODS AND SERVICES
PRODUCED ARE SCARCE.
Shortage- occurs when
producers will not or cannot offer
goods or services at current
Can be long-term or short-term.
Wars and droughts
Factors of Productions
All natural resources used to
produce goods and services
Natural resources are found in
Can include farmland, products on
the land (coal, water, forests).
The effort that a person devotes
to a task for which that person is
Can include medical aid provided
by a doctor, a painting created by
an artist, or the repair of a TV.
Any human-made resource that is
used to produce other goods and
Physical Capital- Human-made
objects used to create other goods
and services (capital goods).
Tools (tractors, pencils, etc.)
Human Capital- knowledge and
skills a worker gains through
education and experience.
Physical Capital Benefits
Ambitious leaders who decide how
to combine land, labor, and capital
resources to create new goods and