 The study of economics explains how productive resources are used to provide the goods and services that satisfy human wants and needs.  Scarcity is the fundamental economic problem facing all societies. We have limited resources and unlimited needs and wants.

 Human  Natural  Capital

 Land (natural resources)  Labor (human resources)  Capital (equipment, machinery)  Entrepreneurship

 What goods and services will be produced?  How will goods and services be produced?  Who will consume the goods and services? (How should it be shared?)

 Economics is considered a social science. Why?  What do economists do?  What is the difference between microeconomics and macroeconomics?

 Needs: Food Shelter Clothing

 Technology  Specialization  Division of Labor

 Gross Domestic Product is the total value of all the goods and services produced for final use in an economy during a given year. It is the most comprehensive measure of an economy’s progress.

 Trade-off  Opportunity Cost  Production Possibilities Curve (PPC)

It is important to study economics for two main reasons – personal financial benefits and good citizenship