1. Individual & Family Scarcity & Limited Resources

2. Scarcity Scarcity is what economics is all about. The better we understand scarcity the better we understand the core of economics. Our desires & wants for goods and services are unlimited (individual, family, business, or society), while the resources to satisfy our desires & wants are limited Scarcity means we can never have all we want of every good & service

3. Something to think about: Student Activity 1.2 question 5 –Identify 3 material things of which you would like more (wants). –Now ask yourself why don’t I get more of these things. –The answer will revolve around the scarcity of resources. As humans, we have the insatiable appetite for more goods & services, but lack the resources to satisfy our wants.

4. Limited Resources Student Activity: –Refer to handout 1.2 question 3 Identify 3 of your limited resources that you allocate daily. Answers should include such things like time, money, energy, material things, capacity to learn, emotions, etc. (The lists are endless) These are great examples of the limited resources that individuals & families have to decide how to allocate.

5. Types of Societal Resources Like individuals, societies cannot satisfy all their wants. All societies (in all countries) have limited resources. These resources are typically divided into four group: –Land –Labor –Capital –Entrepreneurship

6. RESOURCES Labor is the human resource. Labor refers to the mental & physical efforts applied to the production of goods & services. Payment for labor services are called wages. Land is the environmental resource. Land includes all natural resources, land (including anything that grows on or below the land), water, air, and wildlife. Payments for the use of land are called rents.

7. RESOURCES cont. Capital is the physical improvement resource. Capital refers to all relatively permanent improvements made to land. Capital includes buildings, sidewalks, utilities that are installed, and all machinery and equipment that is used to make the improvements. Another type of capital is financial capital, which includes money, stocks, bonds, and deeds to land. Payment for capital is called interest. Entrepreneurship is the risk taking resource. Entrepreneurship make things happen. They are the people who combine labor, land and capital to start businesses. However, not every business is successful. As a matter of fact, more new businesses fail rather than survive. Payment for risk taking entrepreneurship is called profit. Profit motive is the desire for profit that motivates one to engage in business ventures. The ultimate goal of a business is to make money.

8. REVIEW Scarcity Limited resources Labor Land Rents Wages Interest Entrepreneurship Profit Profit motive

9. Student Activity