Scarcity and the Factors of Production

1. Scarcity and the Factors of Production In this lesson, students will be able to define the following key concepts: Scarcity Economics The Factors of Production Entrepreneur E. Napp

2. In a magical world, there is no need for Economics but we live in a world of Scarcity. We need Economics. E. Napp

3. Scarcity • Scarcity is the realization that our wants and desires are unlimited but the world’s natural resources are limited. • In other words, we always want more than we have. • We cannot wave a magic wand to get everything we desire. E. Napp

4. Wouldn’t it be nice if we could just wave the magic wand and multiply our dollars? E. Napp

5. Economics • Due to scarcity, we cannot have everything we want or need. Therefore, we have to make choices. • Economics is the study of the choices we make. E. Napp

6. Which will you choose in a world of limited resources? E. Napp

7. The Factors of Production • Whenever we make a good (an object) or a service (an action performed), we need the Factors of Production. • The Factors of Production are: Land ( Natural Resources) Labor (Paid Workers) Capital (Money and Machines) E. Napp

8. Name the Factor of Production addressed in this diagram. E. Napp

9. Entrepreneur • An entrepreneur is a person who puts together land, labor, and capital to make new businesses. • If your mother opened her own business, she is an entrepreneur. • Bill Gates is also an entrepreneur. E. Napp

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11. Questions for Reflection: • Define scarcity. • Explain how scarcity affects your daily life. • What is Economics? • Why does Economics exist? • Describe the Factors of Production. • Do you want to be an entrepreneur? Explain your answer. E. Napp