E. Napp Scarcity and the Factors of Production In this lesson, students will be able to define the following key concepts: Scarcity Economics The Factors of Production Entrepreneur

E. Napp In a magical world, there is no need for Economics but we live in a world of Scarcity. We need Economics.

E. Napp Scarcity Scarcity is the realization that our wants and desires are unlimited but the world’s natural resources are limited. In other words, we always want more than we have. We cannot wave a magic wand to get everything we desire.

E. Napp Wouldn’t it be nice if we could just wave the magic wand and multiply our dollars?

E. Napp Economics Due to scarcity, we cannot have everything we want or need. Therefore, we have to make choices. Economics is the study of the choices we make.

E. Napp Which will you choose in a world of limited resources?

E. Napp The Factors of Production Whenever we make a good (an object) or a service (an action performed), we need the Factors of Production. The Factors of Production are: Land ( Natural Resources) Labor (Paid Workers) Capital (Money and Machines)

E. Napp Name the Factor of Production addressed in this diagram.

E. Napp Entrepreneur An entrepreneur is a person who puts together land, labor, and capital to make new businesses. If your mother opened her own business, she is an entrepreneur. Bill Gates is also an entrepreneur.

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Questions for Reflection: Define scarcity. Explain how scarcity affects your daily life. What is Economics? Why does Economics exist? Describe the Factors of Production. Do you want to be an entrepreneur? Explain your answer.