3.01 Recognize terminology related to economics

Economics is… Unlimited wants vs. Limited resources The study of how to meet unlimited wants and needs of a society with its limited resources.

Scarcity is… Scarcity is desiring more goods and services than are available It forces peoole, businesses and nations to make choices. AKA – Shortage.

Surplus is… Surplus is desiring less goods and services than are available AKA - Overage

Economic resources are… Includes land, labor, and capital resources which can be used to produce the goods and services that people consume. AKA: factors of production. Land Labor Capital

Land Natural resources including everything contained in the earth and found in the sea. Ex: oil, minerals, gas, and coal

Labor Human resources including all workers in the economy. Ex: full- and part-time workers, managers, public employees, and professional people.

Capital The money needed to start and operate a business or the products used in the production of other goods. Ex: Purchasing lawn equipment to start a lawn care business or securing a warehouse for storing the equipment.

How does entrepreneurship fit in? Incorporates the skills of people who are willing to take the risk of starting their own business. Entrepreneurs organize economic resources in order to create goods and/or services needed and desired in an economy. Ex: Christy uses her horticulture background to begin her summer lawn care business.

What is utility? Utility: Refers to the added value or usefulness of a product. Form Place Time Possession Information

Five Utilities You should already have these from Obj 2, but just in case you don’t….. Form utility: The value added by changing raw materials or putting parts together to make them more useful. Place utility: The value added by having a product where customers can buy it. Time utility: The value added by having a product at a certain time of year or a convenient time of day. Possession utility: The value added by exchanging a product for monetary value. Information utility: The value added by communicating with the customer.