Make a list of 5
things you really
The study of limited
resources but unlimited
wants, which forces
people to make a CHOICE!
What does it cost you to
“attend” this particular
Think about it!
Talk to your partner.
To answer the question, you should have
asked yourself what else you could be
doing during this time?
Make a list…
Next, prioritize your other activities.
The first item on your list of
alternative activities is the
opportunity cost of attending this
Every activity has a cost - what
you gave up.
Because resources are scarce,
choices need to be made.
Choice results in cost.
The cost of any choice is what
you had to give up.
This is called Opportunity Cost.
“Small Picture” “Big Picture”
Study of individual Study of the economy
units. as a whole.
Looking at one thing Concerned with the
at a time TOTAL picture
Individual decision making Societal decision making
Micro or Macro
Write down the subject of newspaper
headlines you did for your current
events and determine whether each
is a micro or macro issue!!!
Then, discuss with your partner – are
Uses resources to achieve wealth
Types of Resources
Goods v. Services
– Good -- An item you can see, feel, and touch
and that requires scarce resources to produce
and satisfies human wants
– Services -- Something that is not physical
that requires scarce resources to produce and
satisfies human wants
=>With your partner list 3 Goods & 3 Services…
Four Factors of Production
(Resources used to achieve wealth)
Labor-an individual providing his/her
services for wages
Capital-equipment that can be used
uses the first three resources to
make a profit. Considered to be a
“risk taker” and business leader.
Draw a Tree Map
Four Factors of
LAND LABOR CAPITAL
Determine which of the four factors of
production it falls under and place it in
the correct place on your tree map:
Cab driver Small restaurant
Bakery Store Owner owner
Brain surgeon Computer software
Highway system Ocean
Come Up With 3 Examples of Your
Own and add it to your tree map
Tree Map Collage of the Four Factors of
Create a collage that illustrates the four
factors of production.
Draw another tree map on your
construction paper and label each
“branch” as one of the four factors of
Find pictures in the magazines that fall
under each category.
(Match the correct term with its definition)
a.) The study of how people use their
1. Scarcity scarce resources to satisfy their
2. Entrepreneur b.) All physical and mental effort
used to produce goods and services
c.) A profit seeker who develops a
4. Labor new product and assumes the risk
of profit or loss
5. Economics d.) Limited resources but unlimited
e.) An item you can see, feel, and
touch and that requires scarce
resources to produce and satisfies
Due to Scarcity, every Society Must
Answer 3 Questions:
1. What goods shall we produce?
2. How shall these goods be
3. For whom should the goods be
*These are known as the 3 Economic
In the U.S. private enterprise must
answer the three Qs as follows:
1. WHAT TO PRODUCE?
U.S. production leans towards
consumer goods & services
2. HOW TO PRODUCE?
U.S. believes in private enterprise
(corporations and small businesses
3. FOR WHOM TO PRODUCE?
U.S. production leans towards the
large middle class
Read the Prompt
Answer the Three Economic
Questions using the resources
provided on the handout with your
Write 1 paragraph for each question
Why does scarcity exist and what does it
force us to do?
List the different types of resources and
factors of production we discussed today
and explain what they help us do.
List the three economic questions and
explain why private enterprise must ask
ourselves the three questions in the U.S.
to make economic decisions.