1. Explain the fundamental economic problem. 2. Examine the three basic economic questions that every society must answer. 3. List and use examples of the factors of production. 4. Explain the paradox of value. 5. List & use examples for the different types of goods.

Economics: study of how people try to satisfy unlimited wants with limited resources. **#1 rule of economics: TINSTAAFL There Is No Such Thing As A Free Lunch

**Major econ. Problem: SCARCITY --occurs when people do not have enough resources to produce all of their needs & wants --does not occur because of lack of $ --ie=heart transplant

**4 Factors of Production 1. land Must be natural & is limited

2. capital Must be used for production

3. labor The work force

4. Entrepreneurs Risk takers in search of a new business

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Economic Products: goods & services that are useful, relatively scarce & transferable 4 types of Goods: 1. Consumer 2. Capital 3. Durable (> 3 years) 4. Nondurable (< 3 years) Service: work performed for someone else

**The Three Basic Questions: 1. What to produce? 2. How to produce it? 3. For whom is the product being produced?

1. Value: worth expressed in dollars & cents **Paradox of Value: some necessities have little value whereas some non-necessities have higher value --think of it as the “diamond- water” paradox Economic Products must have: --Why? Scarcity!

2. Utility: capacity to be useful & provide satisfaction --differs from one person to the next

Wealth: accumulation of those products that are tangible, scarce, useful and transferable --service is not included in wealth (talent cannot be transferred)

Product Partner Project! Improve or come up with a new product! 1.Name it 2.Draw the new product 3.Answer the three questions what –be very descriptive and include the type of good it is how—how is the product going to be made (factory, by hand, by you, by hired workers) for whom—who is your target consumer **product must be school appropriate!

Product Partner Project! Improve or come up with a new product! 4. List and label the four factors of production (this should be the longest part of the project— be detailed! List your names as the Entrepreneurs) 5. What price would you sell it? **product must be school appropriate!