1.1 The Economic Problem

Wants and Needs

Economic Choices Economics is about making ______________. ____________________ is the condition facing all societies because there are not enough productive resources to satisfy people’s unlimited wants. ___________________ __________________, or factors of production, are the inputs used to produce the goods and services people want. Because productive resources are scarce, ____________ and ______________ are scarce too. Making choices means you must pass up some ______________________________. ________________________ examines how people use their scarce resources to satisfy unlimited wants.

“Although your wants and desires are virtually unlimited, the productive resources available to satisfy these wants are scarce.” ______________________________ is the study of how people use their scarce resources to satisfy their unlimited wants

Productive Resources Are also called _________________ of production, inputs or resources. They are broken down into 3 categories: ___________ _______________ is the broad category of human effort, both physical and mental, used to produce goods and services. – __________ is the most important human resource – An __________________ tries to earn a profit by developing a new product or finding a better way to produce and existing one.

Productive Resources (continued) ___________ __________ are also called “gifts of nature,” including land, forests, minerals, oil reserves, bodies of water and even animals. – _______________________ resources can be drawn on indefinitely – ______________________ resources do not renew themselves, so they are available in limited amounts. _____________ ____________________ are also called capital goods. They are creations used to produce goods and services.

Goods and Services A ___________________ is tangible – something you can see, feel or touch. A ______________________ is intangible, or not physical.