2. WHAT IS “ECONOMY” It is the study of the production, exchange and consumption of goods (i.e., products that can be sold) It’s also about deciding how to meet basic needs and wants of individuals The problem is around the issue of “scarcity”. A society’s needs and wants often exceed its “resources” so governments have to decide how those resources will be used. This is called the “law of supply and demand”

3. BASIC ECONOMIC QUESTIONS 1.What is to be produced? A farmer has to decide whether to grow wheat or canola. A government has to decide between increasing funding for education or health care? 2.How is it to be produced? A farmer must consider what technology is needed to produce and process the crop. A government has to determine whether more funding for education comes from tax revenue or cutting funding from another program. 3.For whom is to be produced? A farmer needs to determine if the product is to be sold in Canada or exported. If a government decides to increase the education budget, it has to determine where the funds should go – elementary or secondary or post-secondary

4. TYPES OF RESOURCES 1.LAND RESOURCES: Natural resources that are used to produce goods and services such as land, water, fish, forests, and minerals 2.HUMAN RESOURCES: People to produce goods and services, including fishers, forestry workers, store owners, educators, research scientists, etc. 3.CAPITAL RESOURCES: Money and human made goods which are used to produce other goods and services such as transportation infrastructure, technology and research and education facilities.

5. TYPES OF ECONOMIC SECTORS Economic activities are divided into FOUR SECTORS: Primary, Secondary, Tertiary, and Quarternary. Most Canadians are employed in Tertiary and Quarternary sectors – e.g., service industry Primary activities are: fishing, logging, and farming