2. Bell Ringer Activity
Have you ever had to decide how you would spend your money when you wanted to buy more than one thing. Describe.

3. Read to Learn
Explain how scarcity requires individuals and nations to make decisions about resources.
Describe the four factors of production.

4. The Main Idea
Both people and countries must deal with the problem of scarcity. Nations do not have enough factors of production to produce everything that their population wants. Factors of production are all the economic resources necessary to produce a society’s goods and services.

5. Key Concepts
Making Economic Decisions
Factors of Production

6. Making Economic Decisions
The principle of scarcity states that there are limited resources for satisfying unlimited wants and needs.
scarcity
a lack of resources

7. Graphic Organizer
When dealing with scarcity, it is important to think of the best way to use the item that is in short supply.
Demand
Supply

8. There are four factors of production.
all the economic resources necessary to produce a society’s goods and services

9. Graphic Organizer Natural Resources Labor Resources Capital Resources
Entrepreneurial Resources

10. Natural resources can be processed in various ways to create goods.
raw materials from nature that are used to produce goods

11. Graphic Organizer Wheat Cattle Coal Iron Oil
Renewable resources can be reproduced
Nonrenewable resources are limited
Wheat
Cattle
Coal
Iron
Oil

12. Labor resources can be skilled or unskilled, physical or intellectual.
people who make the goods and services for which they are paid

13. Capital resources are also called capital goods.
the things used to produce goods and services, such as buildings, materials, and equipment

14. Capital Resources
Examples of capital resources include:
Delivery trucks
Supermarkets
Cash registers
Farm equipment

15. Entrepreneurial Resources
Entrepreneurial resources meet society’s changing wants and needs.
entrepreneurial resources
resources used by the people who recognize opportunities and start businesses

16. Entrepreneurial Resources
Entrepreneurship is necessary when starting a business.
entrepreneurship
the process of recognizing a business opportunity, testing it in the market, and gathering the resources necessary to start and run a business

17. Entrepreneurial Resources
An entrepreneur accepts the risks and responsibilities of business ownership.
entrepreneur
an individual who undertakes the creation, organization, and ownership of a business

18. Entrepreneurial Resources
Entrepreneurial resources are individuals who start and direct businesses to produce goods and services to satisfy needs or wants.
Labor resources are people who produce the goods or services.