What is Economics? Scarcity and Choice Kerry Montano University High School

Objective After taking notes from a Powerpoint, student will work with a partner to identify conditions that might cause people to treat scarce resources as if they were not scarce

What is economics? Economics is the study of how people try to satisfy what appears to be seemingly unlimited and competing wants through the careful use of relatively scarce resources. Resources are inputs used to create economic goods: Land, Labor, Skills, Natural resources, capital (human made resources) Capital enhanced our ability to produce in the future

We have the same resources as cavemen but they did not know how to use them

Scarcity requires choice Scarcity – there is less of a good freely available from nature than people would like. Wouldn’t we all love to drive up to our beachfront mansions in our fancy new Porsches?

What is scarce? Weeds are not scarce because they are usually considered undesirable. If a particular weed is found to have cancer fighting qualities, it will become scarce

If there is more than one use of a resource, it is considered scarce Scarce goods – food, meat, veggies, etc. Limited Resources – land has degrees of fertility Choice is the act of selecting among alternatives

Which of the following are considered scarce? Old economics textbooks collected in a bookcase near the teacher’s desk with a sign that says “Free books, take as many as you want.” The books have been there for three years.

Scarce? Old economics textbooks collected in a bookcase near the teacher’s desk with a sign that says “Free books, take as many as you want.” Another sign posted in the hallway says “$10 paid for any recycled textbook. Bring books to the Principal’s office.”

One economics textbook, five students who wish to do well in the economics course, and an important test in class the next day. One economics textbook, five students who are not taking economics, and an important test in the economics class the next day.

Petroleum in Japan, a country without its own oil fields and without oil reserves. Petroleum in Saudi Arabia, a country with many oil fields and oil reserves.

With a partner, discuss the following 4 scenarios to determine which examples show people treating scarce resources as not scarce and which examples show people treating scarce resources as scarce In your notes, write your answers and be prepared to share with the class

1. Fountain in Rome Water fountains in Rome flow continuously with water carried by viaducts from the Italian mountains. People walking in Rome quench their thirst by drinking from these fountains. But most of the water flows into the street and down the drains to a river that passes through the city.

2. Leftover restaurant food At closing time, restaurants in the United States are required to throw away all uneaten food. To meet health standards for food preparation and the safety of consumers, the food cannot be stored for use the next day. Also, the law prohibits restaurant employees from giving the foodto the poor or dispersing it to local food banks.

3. Oxygen Oxygen is taken from the air and stored in containers. When divers wish to stay underwater for long periods of time, they purchase container- stored oxygen and breathe from it during their underwater activities.

4. Beach pebbles Pebbles are taken from a beach to build a walkway in a homeowner’s lawn. No one else wants the pebbles. The pebbles are not necessary for the lake’s ecosystem or animal habitat.

1. Scarce resource treated as not scarce 1. Scarce resource treated as not scarce. The water has other valuable uses, such as irrigation or sewer treatment. 2. Scarce resource treated as not scarce. The food could feed hungry people; it could be stored for future consumption; or it could be used as compost to improve soil conditions in gardens.

3. Oxygen in the air around us is not scarce 3. Oxygen in the air around us is not scarce. People routinely acquire it at no cost. There is more of it than individuals can use. But oxygen underwater is scarce, as are the resources needed to capture oxygen and store it in containers for underwater use. So container-stored oxygen is scarce.

4. Not scarce. The pebbles have no valuable alternative use 4. Not scarce. The pebbles have no valuable alternative use. The resources necessary to move the pebbles [time and effort, for example] are scarce. They could be used for other valuable purposes.