Ch.1 Sec-1

 What is Economics?  Economics ◦ The study of how individuals, families, and societies use limited resources to fulfill their unlimited wants and needs

 Things I need to live include _________.  Things I want to have include_________.  Need ◦ Things needed for basic survival (food, shelter, etc..)  Want ◦ Anything other than what is needed for basic survival

 Spending decisions involve choices.  Each choice competes against other choices. ◦ Examples?  Businesses must make daily decisions ◦ What to produce? ◦ When to produce it? ◦ When to stop…etc  Societies face choices ◦ How to utilize resources when producing goods and services?

 Why can’t we just choose everything? ◦ All Resources are limited: competition for resources  Scarcity ◦ Condition of not being able to satisfy all wants because the wants exceed what can be made from all available resources.  What is your most scarce resources? ◦ What competes for that for that resource?

1. Land ◦ Natural resources, both land surface and water 2. Labor ◦ Human effort towards producing goods and services 3. Capital ◦ Previously made goods used to produce other good and services 4. Entrepreneurship ◦ Ability of individuals to develop new products and new businesses 5. Technology ◦ Advance in knowledge that leads to new and improved goods or and better ways of producing them

Factor of Prod.Example 1Example 2 Land Labor Capital Entrepreneurship Technology

 What might be the most important factor of production. Why?