Do Now: Define the following words

1. Need Want Goods Services Scarcity Economics Shortage Entrepreneur Factors of Production Land Labor Capital Physical capital Human capital Do Now: Define the following words

2. What is economics?

3. Economics • The study of how individuals, businesses, and governments make choices when faced with a limited supply of resources • Economics is simply about how we work. What we produce. And how we distribute and ultimately use what we’ve produced. • Economics is about who does what, who gets what, and what they do with it.

4. You can’t always get what you want… • Need: something essential for survival Examples: • Want: something we desire, but is not necessary for survival Examples:

5. People satisfy their needs and wants with goods and services • Goods: physical objects that someone produces • Services: actions/activities that one person performs for another (ie: medical care)

6. Problem of Limits • People’s needs and wants are unlimited – when one want is satisfied, another pops up.. • Goods and services are limited – no one can have an endless supply of anything • Scarcity: the fact that limited amounts of goods & services are available to meet unlimited wants • Forces people to make choices • Always exists • Shortage: consumers want more of a good or service than producers are willing to make available at a particular price

7. That Entrepreneurial Spirit… • Entrepreneur: a person who decides how to combine resources to create goods and services • Anyone who opens a business is an entrepreneur

8. How to be Successful in Business • Step 1: Assemble Factors of Production • Factors of production: the resources that are used to make goods and services • Step 2: Determine the Land, Labor, and Capital • Land: all natural resources used to produce goods and services • Labor: the effort people devote to tasks for which they are paid • Capital: any human-made resource that is used to produce other goods and services

9. Capital – it’s not just $$ • Capital(any human-made resource that is used to produce other goods and services)can be divided into two types • Physical capital: the human-made objects used to create other goods and services • EX: the buildings that house a computer manufacturing company, as well as all the equipment and tools to make those computers • Also known as capital goods • Human capital: the knowledge and skills a worker gains through education and experience • EX: schooling and college experience

10. Wrap up • What is the main focus of economics? • What are the factors of production? • Why are goods and services scarce?