1 / 18

Chapter 1, Section 1

Chapter 1, Section 1. Scarcity and the Science of Economics Fatmeh Reda Information compiled from: Glencoe Economics: Principles and Practices. The Fundamental Economic Problem. Think of a time that you wanted something and you couldn’t have it…

irina
Download Presentation

Chapter 1, Section 1

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Chapter 1, Section 1 Scarcity and the Science of Economics Fatmeh Reda Information compiled from: Glencoe Economics: Principles and Practices

  2. The Fundamental Economic Problem • Think of a time that you wanted something and you couldn’t have it… • Think of a time you had something and you wanted something better… • Think of a time you wanted something and you felt like you had to have it… but it wasn’t a necessity…. • We All Want More Than We Have

  3. Scarcity • The main problem in economics is SCARCITY • This is the condition that results from society not having enough RESOURCES to produce [or make] al the things that people would like to have • And so, ECONOMICS is the study of how people try to satisfy their endless wants through the careful use of scarce resources

  4. Needs and Wants • NEED • Basic requirement for survival • Examples: food, shelter, clothing • WANT • Something we would like to have but is not needed for survival • Examples: toys, movies, books, music players Break-Up Activity In pairs, make a list of items in your notes of things you think are NEEDS. And then make a list of things you think are WANTS.

  5. Three Basic Questions Because we live in a society that has scarce resources, we need to make careful economic choices about how we are going to use these resources.

  6. WHAT to Produce • Should the resources be used to make equipment for the military or to make food? • Should a piece of empty land in a city be used to build a community park or more houses? • Should the land be used to make houses for low-income people, middle-income, or high-income? • Should we use farmland to produce more corn or use it to raise cows for meat?

  7. HOW to Produce • Should factories use only machinery or should workers? • Should factories add more machinery and fire people, or take our machinery and hire more people? OR

  8. FOR WHOM to Produce • This decision is about who will receive the things produced • Are houses for low-income workers, professionals, or the very rich? • Think about target audience and who will buy the product • Who is the target audience for the new Call of Duty game? • Who is the target audience for the Twilight series?

  9. Factors of Production • There are four resources- land,capital,labor, and entrepreneurs, that are needed to produce the goods and services we want.

  10. Land • “gifts of nature” • Natural resources not created by humans • Includes: deserts, fertile fields, forests, mineral deposits, livestock, sunshine, climate • Because its limited, we call is a fixed or limited supply

  11. Capital • Sometimes called CAPITAL GOODS • These are the tools, machinery, equipment, and factories used in to produce goods and services • These were themselves once the result of production

  12. Labor • People with all their efforts, abilities, and skills

  13. Entrepreneurs • Risk takers in search of profits who does something new with existing resources • Driving force behind the economy because they start a new business or bring new products into the market

  14. The Scope of Economics • Economics is a social science because it deals with the behavior of people as they deal with scarcity • Four elements to the study of Economics: description, analysis, explanation, and prediction

  15. Description • Describes economic activity • GROSS DOMESTIC PRODUCT [GDP]: dollar value of all final goods, services, and structures produced within a country’s borders in a 12-month period • This is the most COMPREHENSIVE measure of a country’s total output and measures nation’s economic health

  16. Analysis • Helps to discover why things work and how things happen, and why things are the way they are • Examples: • Why are gas prices so high? • Why are not enough wii made? And how does this affect the price of a wii system?

  17. Explanation • They communicate knowledge after they analyze something • Examples: • Gas prices are high because the United States stopped importing gasoline from Venezuela. • Orange juice prices went up because Florida suffered a freeze two weeks ago and they lost a major part of their crop • Corn is so cheap because many farm and factories produced corn to the point that there is more corn that is needed.

  18. Prediction • Making smart guesses about what might occur in the future • Examples: • Economists predict that house values will continue to decrease in the next two years as more and more homes go on foreclosure. • Economists can predict that based on previous sales of the wii system, coming up with a newly upgraded system will sell out within a few days.

More Related