What is Economics? Chapter 1.1

The Economic Problem Although our wants/desires are unlimited, the productive resources available to satisfy these wants are scarce.

Not enough productive resources to satisfy people’s unlimited wants. Scarcity Not enough productive resources to satisfy people’s unlimited wants.

Economics: What is it?? The study of how people use these scarce resources to satisfy their unlimited wants. *choices*

Productive Resources Human Resources 2.Natural Resources 3.Capital Resources

Goods & Services Productive resources combined  goods and services Goods: tangible Services: intangible

What is Economics: Activity Choose a profession that you would like to enter. Identify the following: What good/service will you provide? How does this good/service satisfy a need or want? Which productive resources will you use? How can you tell that these resources are scarce? Share with your partner

Four Factors of Production Land-natural resources – oil, water, wood, iron, gold. etc Labor-human resources - an individual providing his/her services for wages Capital-capitial resources - equipment that can be used for production Entrepreneurship-someone that uses the first three resources to make a profit. Considered to be a “risk taker” and business leader.

Copy the Table in your Spiral Notebook!!! Land Labor Capital Entrepreneurship

Determine which of the four factors of production it falls under: Computer Forests Cab driver Bakery Store Owner Petroleum Automobile Brain surgeon Factories Tractor Highway system Radio Mountains Small restaurant owner Minerals Pencil Computer software developer Waitress Ocean Fish

Come Up With 3 Examples of Your Own and include it in your table Land: Labor: Capital: Entrepreneur:

Due to scarcity, every Society Must Answer 3 Questions: What goods shall we produce? How shall these goods be produced? For whom should the goods be produced?

In the U.S. the three Qs are answered as follows: WHAT TO PRODUCE? U.S. production leans towards consumer goods & service 2. HOW TO PRODUCE? U.S. believes in private enterprise (corporations and small businesses privately owned) 3. FOR WHOM TO PRODUCE? U.S. production leans towards the large middle class