UNIT VI – Fundamentals of Economics Scarcity UNIT VI – Fundamentals of Economics

What is scarcity? Concept that ALL of the things we want and need are limited There are not enough resources for everyone to have unlimited access to everything

How do we solve scarcity? Certain questions have to be answered in order to decide how to get limited resources to as many people as possible These questions are… What to produce? How to produce? For whom to produce?

Producer v. Consumer Producer – the individual or manufacturer who is creating the goods and services Consumer – the individual that purchases the goods and services

Economic Models Economists try to answer these questions through the creation of economic models. They are simplified representations of the real world that are used to explain how the economy works

Macro v. Micro Economics Macroeconomics – study of the economy as a whole Microeconomics – study of individual consumers and businesses Economic models will be created by economists to look at how both levels of economics can be affected by decisions of producers and consumers