1. AIM: Why is scarcity the basic economic problem?

2. Economics
The study of how people seek to satisfy their needs and wants by making choices
Solving the problem of scarcity
Need – Something you need to survive
Want – Something you want but is not essential for survival
Can you think of some needs and wants?

3. Cookies Are there any cookies lovers in class?
Who wants a piece of chocolate?

4. Chocolate
Work in pairs and try to come up with a way to solve our problem – Try to come up with more than 1 solution.
What was the “problem” in our example?

5. SCARCITY

6. Scarcity The basic problem in the world is scarcity.
Economics is a course that deals with solving the problems of scarcity
Water, trees (lumber), time, money, oil/gas, land, food, are all resources that are scarce

7. Scarcity

8. The Three Basic Economic Questions
Each society must answer three basic questions because of scarcity
What to produce?
How to produce?
For whom to produce?

9. Tradeoffs vs. Opportunity costs
SCARCITY= Making Choices
Making Choices= Costs
The costs/sacrifices you’ll have to make are called tradeoffs.
Your most valued tradeoff (the one you really don’t want to give up) is called the opportunity cost.

10. What are the tradeoffs/opportunity cost of buying an IPhone?

11. Make a list of five things you would want if money were no object.