1. Relative Scarcity in Society Business Economics Fall Semester 2011 Standard A1

2. Standards After this lesson you will be able to… – Describe relative scarcity exists in all societies

3. Choices, Choices, Choices Economics is about making choices. You make choices everyday. You know more about economics than you know.

4. The Economic Problem Would you like a new car, a nicer home, better meals, more free time, more spending money, more sleep? Who wouldn’t? Although your wants, or desires, are virtually unlimited, the productive resources available to help satisfy these wants are scarce. Scarcity creates the economic problem.

5. Scarcity Condition facing al societies because there are not enough productive resources to satisfy people’s unlimited wants. Productive resources – factors of production, are the inputs used to produce the goods and services that people want.

6. When you make a choice you must go without satisfying some other wants. You cannot have all the goods and services you would like, so you must choose among them continually. Making choices means you must pass up some alternatives.

7. Economics Defined Examines how people use their scarce resources to satisfy their unlimited wants. Example: – If you decide to buy a mountain bike, what alternative products might you then not be able to afford?