Economic Resources

1
Economic Resources

• WARM UP
• Make a list of 10 things you want!!!
• 1.
• 2.
• 3.
• 4.
• 5.
• 6.
• 7.
• 8.
• 9.
• 10.

2
Scarcity

• The Economic Problem

3
SCARCITY
Limited Resources
4
SCARCITY
Unlimited Wants
5
Economics Is

• The study of limited resources but unlimited
  resources, which forces people to make a CHOICE!

6
Opportunity Cost

• How much does it cost you to attend this
  particular class session?

Think about it!Before going on, try to come up
withan answer to this question. Talk with a
partner.
7
Opportunity Cost

• To answer the question, you should have asked
  yourself what else you could be doing during this
  time?
• Next, prioritize all of these other activities.

8
Opportunity Cost

• The first item on your list of alternative
  activities is the opportunity cost of attending
  this class.
• Every activity has a cost - what you gave up.

9
Opportunity Cost

• Because resources are scarce, choices need to be
  made.
• Choice results in cost.
• The cost of any choice is what you had to give
  up.
• This is called Opportunity Cost.

10
EconomicsTWO BRANCHES

• Microeconomics Macroeconomics

Small Picture Big Picture
Study of individual Study of the
economy units.
as a whole. Looking at one thing
Concerned with the at a time TOTAL
picture Individual decision making
Societal decision making
11
Micro or Macro

• Write down the subject of newspaper headlines you
  did for your current events and determine whether
  each is a micro or macro issue!!!

12
Four Factors of Production

• Land-natural resources
• Labor-an individual providing his/her services
  for wages
• Capital-equipment that can be used for production
• Entrepreneurship-someone that uses the first
  three resources to make a profit. Considered to
  be a risk taker and business leader.

13
Draw a Tree Map (Assignment 2 -- continued)
Land Labor Capital Entrepreneurship

14
Draw a Tree Map
15
Determine which of the four factors of production
it falls under

• Computer
• Forests
• Cab driver
• Bakery Store Owner
• Petroleum
• Automobile
• Brain surgeon
• Factories
• Tractor
• Highway system

• Radio
• Mountains
• Small restaurant owner
• Minerals
• Pencil
• Computer software developer
• Waitress
• Ocean
• Fish

16
Come Up With 3 Examples of Your Own and add it to
your tree map

• Land
• Labor
• Capital
• Entrepreneur

17
Tree Map Collage of the Four Factors of
Production

• Create a collage that illustrates the four
  factors of production.
• Draw another tree map on your paper and label
  each branch as one of the four factors of
  production.
• Find pictures in the magazines that fall under
  each category.

18
Due to Scarcity, every Society Must Answer 3
Questions

• What goods shall we produce?
• How shall these goods be produced?
• For whom should the goods be produced?
• These are known as
• The 3 Economic Questions

19
In the U.S. the three Qs are answered as follows

1. WHAT TO PRODUCE? U.S. production
   leans towards consumer goods service
2. HOW TO PRODUCE? U.S. believes
   in private enterprise (corporations and small
   businesses privately owned)
3. FOR WHOM TO PRODUCE? U.S.
   production leans towards the large middle class