Scarcity and the Factors of Production In this lesson, students will be able to define the following key concepts: Scarcity Economics The Factors of Production Entrepreneur

In a magical world, there is no need for Economics but we live in a world of Scarcity. We need Economics.

Scarcity Scarcity is the realization that our wants and desires are unlimited but the world’s natural resources are limited. In other words, we always want more than we have. We cannot wave a magic wand to get everything we desire.

Wouldn’t it be nice if we could just wave the magic wand and multiply our dollars?

Economics Due to scarcity, we cannot have everything we want or need. Therefore, we have to make choices. Economics is the study of the choices we make.

Which will you choose in a world of limited resources?

The Factors of Production Whenever we make a good (an object) or a service (an action performed), we need the Factors of Production. The Factors of Production are: Land ( Natural Resources) Labor (Paid Workers) Capital (Money and Machines)

Name the Factor of Production addressed in this diagram.

Entrepreneur An entrepreneur is a person who puts together land, labor, and capital to make new businesses. If your mother opened her own business, she is an entrepreneur. Bill Gates is also an entrepreneur.

Questions for Reflection: Define scarcity. Explain how scarcity affects your daily life. What is Economics? Why does Economics exist? Describe the Factors of Production. Do you want to be an entrepreneur? Explain your answer.