1. Wednesday, February 15th Test Grades are posted. If you didn’t take the test yesterday, you must take it today. Test Grades are posted. If you didn’t take the test yesterday, you must take it today. Essential terms Essential terms Scarcity, Shortage, Factors of Production, Land, Labor, Capital, Entrepreneur

4. Yesterday’s Vexing Questions Percent incorrect: Question 5 58% Question 5 58% Question 7 38% Question 7 38% Question 8 40% Question 8 40% Question 10 51% Question 10 51% Question 13 59% Question 13 59% Question 14 43% Question 14 43% Question 15 51% Question 15 51% Question 20 36% Question 20 36% Question 22 37% Question 22 37% Question 24 46% Question 24 46% Question 25 68% Question 25 68% Question 26 47% Question 26 47% Mean for Multiple Choice: 74.3%

5. Scarcity 1. If a small amount of something is available compared to the amount wanted, the item is considered scarce. 2. If an item has more than one valuable use, it is scarce.

6. Scarce or Not? Old economics textbooks collected in a bookcase near my desk with a sign that says “Free books, take as many as you want.” The books have been here for 3 years Old economics textbooks collected in a bookcase near my desk with a sign that says “Free books, take as many as you want.” The books have been here for 3 years Not Scarce: No alternative use Not Scarce: No alternative use

7. Scarce or Not? Old economics textbooks collected in a bookcase near my 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.” Old economics textbooks collected in a bookcase near my 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.” Scarce: The books may be read or they may be recycled. Two valuable uses. Scarce: The books may be read or they may be recycled. Two valuable uses.

8. Scarce or Not? One economics textbook, five students who wish to do well in the economics course, and an important test is the next day. One economics textbook, five students who wish to do well in the economics course, and an important test is the next day. Scarce: The one book could be used by five different people; it has valuable alternative uses. Scarce: The one book could be used by five different people; it has valuable alternative uses.

9. Scarce or Not? One economics textbook, five students who are not taking economics, and an important economics test is the next day. One economics textbook, five students who are not taking economics, and an important economics test is the next day. Not Scarce: Same number relationship between students and books but the information in the book is not valuable to the students Not Scarce: Same number relationship between students and books but the information in the book is not valuable to the students

10. Scarce or Not? Petroleum in Japan, a country without its own oil fields and without oil reserves Petroleum in Japan, a country without its own oil fields and without oil reserves Scarce. Petroleum has many valuable uses in Japan. Scarce. Petroleum has many valuable uses in Japan.

11. Scarce or Not? Petroleum in Saudi Arabia, a country with many oil reserves and oil fields. Petroleum in Saudi Arabia, a country with many oil reserves and oil fields. Scarce. Petroleum has many valuable uses in Saudi Arabia and it can be sold to other people in other countries. Thus it has many valuable uses. Scarce. Petroleum has many valuable uses in Saudi Arabia and it can be sold to other people in other countries. Thus it has many valuable uses.

12. Natural Resources - Land Gifts of nature Gifts of nature Things found on earth Things found on earth Land for farming Land for farming Water, oil, minerals Water, oil, minerals All these things we call “land” All these things we call “land”

13. Human Resources - Labor Effort people make towards a task for which they are paid Effort people make towards a task for which they are paid Auto workers Auto workers Artists Artists Doctors Doctors Teachers Teachers All of these we call “Labor” All of these we call “Labor”

14. Capital Human made resources Human made resources Used to produce other goods Used to produce other goods Physical Capital – building, tools, etc. Physical Capital – building, tools, etc. Human Capital – knowledge and skills of workers Human Capital – knowledge and skills of workers