The Economic Problem AS Economics

Aims and Objectives Aim: To understand the nature and purpose of economic activity and scarcity. Objectives: Define economic problems. Describe the economic activity and problems associated with scarce resources.

Wants and Needs Think of 3 things you want.... Think of 3 things you need....

The Nature and Purpose of Economic Activity The economic system provides for peoples’ wants and needs in the form of goods and services. An Economic System attempts to solve the following problems: 1.What should we produce? 2.How should we produce it? 3.For whom should it be produced?

Economic Welfare If an economic system organised the wants and needs of people effectively we would see people’s economic welfare increase. Economic welfare is the benefit or satisfaction gained from the allocation of resources.

The Resource Allocation Game 4 countries: UK, France, South Africa & India. Make and trade a shape which is being demanded from the market.

The Resource Allocation Game Rules The object of the game is to make as many shapes and accumulate as many points as possible. The value of each shape is given on the board. Shapes must be to the exact measurements given, the judge’s decision is final. Groups may trade or barter with each other, for materials or equipment. Any unsuitable behaviour must be reported at once to the judges. A running total of the scores will be displayed on the board. At any time changes with regard to: value of shapes, additional information or equipment, changes in trading etc. can be dispensed at the discretion of the judges. The winner is the team with the most points scored. The aim of the game is to win.

Products Demanded. #1 5 5 White Squares 5cm X 5cm 20 Points for a set of 3 squares. Measurements must be accurate!!!

Products Demanded. #2 White Squares 10cm X 10cm 30 Points for a set of 3 squares. Measurements must be accurate!!! 10

Products Demanded. #3 Blue Squares 10cm X 10cm 50 Points for a set of 3 squares. Measurements must be accurate!!! 10

Products Demanded. #4 Blue Circles 10cm diameter 70 Points for a set of 2 circles. Measurements must be accurate!!! 10

Products Demanded. #5 White Squares 10cm X 10cm 60 Points for a set of 3 squares. Measurements must be accurate!!! 10

Products Demanded. #6 Blue Squares 5cm X 5cm 90 Points for a set of 3 squares. Measurements must be accurate!!! 5 5

Scarcity of Resources TASK: Describe what happened in the game. Resources are scarce in economies and include: Land, Labour, Capital and Enterprise. Resources are not always allocated fairly, which means that economic welfare is different between people and indeed nations.