SCARCITY

The basic economic problem that arises because people have unlimited wants but resources are limited. Because of scarcity, various economic decisions must be made to allocate resources efficiently.

When we talk of scarcity within an economic context, it refers to limited resources, not a lack of riches. These resources are the inputs of production: land, labor and capital. People must make choices between different items because the resources necessary to fulfill their wants are limited. These decisions are made by giving up (trading off) one want to satisfy another.

WHAT DETERMINES A PERSON’S SALARY? Why do professional athletes make so money and people who work as firefighters, police, etc do so much in our society, yet make so much less? Look at scarcity of skill of person

Diamonds/Water Water is necessary for life, but yet costs so little Diamonds provide no benefit but cost so much Why the difference? Scarcity.

Professional athletes are a scarce resource- they are in high demand An MVP for a Superbowl team is given his salary because only a few people can actually perform his job well, so he is rewarded with salary They make this money because people with their skills are scarce.

SUPPLY AND DEMAND For people in various occupations, the scarcity of the individuals determine the salaries in question, not the importance of the job to society

NFL SALARIES 1,696 NFL players Average salary of an NFL player in was $1.9 million Quarterbacks in 2013: Average salary is $3,840,017 Drew Brees: $20 million/year Peyton Manning: $19.2 million/year /nfl-average-salaries-by-position/2/

TEACHERS 2000 Census: 6.2 million teachers : 3,083,266 teachers Average Salary: $55,418 Males: 23.9% of teachers