UNIT 6 The Problem of Scarcity

Objectives  Explain why individuals and nations must make economic choices.  Give an example of an opportunity cost.  Describe what an economic system does.  List the three major economic inputs and give an example of each.

Objectives  Explain why infrastructure is important to an economic system.  Describe the benefits of advanced technology.

Marketing Terms  scarcity scarcity  opportunity cost opportunity cost  economic system economic system  economic inputs economic inputs  economic outputs economic outputs  land land  natural resources natural resources  labor labor  entrepreneurship entrepreneurship  capital capital  capital goods capital goods  final product final product  infrastructure infrastructure  technology technology  advanced technology advanced technology

Scarcity  Scarcity Scarcity  not enough resources –to meet needs  affects individuals and nations Give examples of scarce resources.

Scarcity  Some resources  water  trees  oil  A resource can be used only once  oil used to fuel a car cannot be used to heat a home

Scarcity  Money is also a scarce resource  the money you spend on one thing –cannot be spent on something else  example: the money you spend on food and snacks –cannot be spent on new clothes  The opportunity cost of a decision is the value of the item you did not chooseopportunity cost

Scarcity  The opportunity cost of  the decision to buy dinner at a restaurant –is the cost of the clothes you did not buy

An Economic System  A system accomplishes a task with these three parts  inputs  a mechanism  outputs  The purpose of most systems is  to produce the outputs

An Economic System  An economic systemeconomic system  is developed by a nation –to turn its resources into products  An economic system consists of  economic inputs  a mechanism  economic outputs

An Economic System  Economic inputs Economic inputs  resources used to make products  Mechanism  the process of production  Economic outputs Economic outputs  goods, services, and ideas Name some economic outputs of the United States economy.

Economic Inputs  Economic inputs are  the resources used to make products  Three categories of economic inputs  land  labor  capital Think of a product you use. What resources were used to make this product?

Economic Inputs

Land  Land Land  includes all of a nation’s natural resources  Examples  soil, water, minerals, plants, animals, and climate

Land  Natural resources are Natural resources  scarce  unequally distributed among nations What natural resources are scarce in the United States?

Labor  Labor Labor  the people who make products  Labor includes  workers’ levels of education, skills, and productivity

Labor  Entrepreneurship is the Entrepreneurship  ability to start new businesses  An economy with many successful entrepreneurs  is usually a successful economy

Capital  Capital Capital  manufactured products –used to make other products  Capital goods is another term for capital Capital goods  because capital consists of –goods used to make other goods

Capital  A final product is a goodfinal product  that is purchased by a consumer –examples: cars, clothing, shoes, refrigerators, and books  Capital goods are used to make  final products Name some final products that you buy.

What final products might be made using these examples of capital goods?

Capital  The term capital is also used as the short form for the term  financial capital  Financial capital is the money used to buy capital goods  So the term capital can refer to  capital goods (machinery, etc.) or  money used to buy capital goods

Infrastructure  Infrastructure Infrastructure  necessary for a modern economy  includes transportation systems and utilities

Infrastructure  Transportation systems  highways, bridges, railroads, public transportation, seaports, and airports  Utilities  sanitation systems, electric power plants, water systems, and telephone service Describe examples of infrastructure you have used today.

Technology  Technology Technology  use of tools –to improve human life

Technology  Early technology  simple machines  machines powered by people or animals  Advanced technology Advanced technology  industrial technology –steam and combustion  digital technology –electricity used to control data

Review  What are the three parts of a system?  Name the three categories of economic inputs.  What is the difference between capital goods and final products?  Define infrastructure and give examples.  How does technology affect human productivity?

WORKOUT  International Natural Resources (2 days)  In teams of 2 complete this assignment and then talk about what you discovered on the 3 rd day  Philly Cheesesteak Sandwich Use both your learned and prior knowledge to complete this task.  UNIT 6 TEST

Glossary  advanced technology. Industrial and digital technologies.  capital. Any manufactured product used to make another product; includes machinery, buildings, vehicles, and computers; also can refer to the money used to buy capital. Back

Glossary  capital goods. Manufactured products used to make final products.  economic inputs. Resources used to make products.  economic outputs. Products (goods, services, and ideas) produced by an economic system. Back

Glossary  economic system. The system that a nation has developed to turn its resources into products that satisfy needs.  entrepreneurship. The willingness and ability to start a new business. Back

Glossary  final product. Consumer product, that is, a product purchased by consumers.  infrastructure. The transportation systems and utilities necessary for a modern economy.  labor. Workers; the people who turn resources into products; also called human resources. Back

Glossary  land. All the natural resources that a nation has.  natural resources. Raw materials; examples include soil, water, minerals, plants, animals, and climate.  opportunity cost. Value of the opportunity you did not choose. Back

Glossary  scarcity. Condition in which there are not enough resources to meet needs.  technology. Use of tools to improve human life. Back