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Resolving Scarcity

Resolving Scarcity. Finite Resources. All countries have water, minerals, soil, plants and people. However, there are limited or finite resources. These resources are scarce. These are the 4 factors of production. Infinite wants. Needs include things like survival , water , shelter.

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Resolving Scarcity

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  1. Resolving Scarcity

  2. Finite Resources All countries have water, minerals, soil, plants and people. However, there are limited or finite resources. These resources are scarce. These are the 4 factors of production.

  3. Infinite wants Needs include things like survival , water , shelter. Wants are infinite or unlimited. People want more holidays, better cars, homes.

  4. The economic problem The basic economic problem is that resources are finite and wants are unlimited. Demand is greater than supply. The study of economics is how to allocate a nations resources between different users.

  5. The economic problem

  6. Activity Question 1 on page 42

  7. What to produce? Schools vs. libraries vs. roads vs. hospitals How to produce? The use of LLCE For whom to produce? Should certain groups get more or less than other groups. ALL THIS DEPENDS ON THE TYPE OF ECONOMIC SYSTEM THAT EXISTS

  8. Choice and Opportunity Cost Choice is faced by individuals, businesses and government Individuals : decide how to spend there limited budget Business also decide where to spend their budget Government must decide where to spend their budget

  9. Opportunity Cost There will be a cost when individuals, business and government make their choice. There is a sacrifice made.

  10. Activity Describe the meaning of opportunity cost.

  11. Production Possibility Curve The idea of opportunity cost can be illustrated using a PPC The PPC shows the combination of different resources when all resources are being used

  12. Activity Show the opportunity cost

  13. Movement of the PPC Use resources more efficiently New production methods Discovery of new resources PPC can move This is called Economic Growth

  14. Homework Question 2 on page 44 Economics in practice on p 45

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