Presentation Transcript

1. - "science of scarcity" ECONOMICS Scarcity Choices Opportunity Cost What is given up YOU CAN’T HAVE EVERYTHING YOU WANT!!! Choices Unlimited Needs and Wants Demand Limited Resources Supply
2. Scarcity Problem Food, clothing, shelter, New car, mansion, Nintendo DS, jewelry, iPod, projector, digital camera, good health, children, camcorder, laptop warmth, indoor plumbing, rollerblades, a sense of personal worth, Plasma TV, literacy, high economics grade, cell phone, compact discs, Wii Land,Labor,Capital,Entrepreneur Rent,Wages, Interest, Profits Limited Resources Unlimited Human Wants
3. The Factors of Production THE SCARCE INGREDIENTS USED TO PRODUCE GOODS AND SERVICES . Land [natural resources] – Nature’s items [“gifts of nature”] A. In the earth - coal, oil, fossil fuels, etc. B. On the earth – vegetation and water C. In the atmosphere – sun, wind, and rain Water Wind “Gifts of Nature” Fossil fuels Sun
4. . Labor [human resources] A. Physical – pro athletes & lumberjacks B.Intellectual – ministers, doctors & lawyers
5. Capital (machines and tools) Nn. CAPITAL [tools, machinery, & factories] Can produce something directly with these The word CAPITAL can also be used to describe MONEY used to start a business. But a pile of money is not a tool and can’t produce anything by itself.
6. Economic Way of Thinking . Do the Benefits outweigh the cost? Scales of Economics Expected marginal benefits Expected marginal costs Marginal is defined as “additional”
7. Basic Economic Choices What to produce? How to produce? Who receives? Scarcity Imposes Answers Determine The Type of Economic System Market Traditional Command
8. ALTERNATIVE ECONOMIC SYSTEMS Market Model- the three fundamental questions are answered by individuals in their own self-interest. Command Model- the three fundamental questions are answered exclusively by the government. Traditional Model- the three fundamental questions are answered through customs.
9. ALL OF THE WORLD’S SYSTEMS ARE MIXED MARKET COMMAND TRADITIONAL
10. Production Possibilities Curve [PPC] A 10 B Graphical representation of the opportunity cost of using scarce resources to produce one good [or service] instead of another good [or service]. 7 Capital Good [Robots] C Capital Goods 3 Consumer Good [iPhones] Demonstration of economic growth 6 4 5 Consumer Goods (food, shelter, clothing)
11. Economic Growth More/better resources Better technology A’ 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Production Possibilities Curve B’ A B C’ Unattainable C Industrial Robots D’ D Now Attainable Attainable E’ E 0 1 2 3 4 5 6 7 8 9 Pizzas