FrontPage: Imagine you are as rich as Bill Gates. Can/do you “have it all”? The Last Word: No homework

Imagine you are as rich as Bill Gates. Can you “have it all”?

a social science that studies how individuals, governments, businesses and nations make choices on allocating scarce resources to satisfy their unlimited wants. a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services The theories, principles, and models that attempt to explain how wealth is created and distributed in communities, how people allocate resources that are scarce and have many alternative uses, and other matters that arise in dealing with human wants and their satisfaction.

Unlimited wants – We all want more, even if it’s just time. Limited resources The basic problem of economics = “Scarcity” There just isn’t enough “stuff” for all of us Additionally, there are many different uses for that stuff

What all can you do with the following items? (try to name 2-3 things) Crude Oil WaterCowsTime

Wants vs. Needs wants: desires that can be satisfied by consuming a good or service. needs: things, such as food, water, clothing, and shelter that are necessary for survival. Scarcity vs. Shortage - scarcity: the permanent situation that exists in which there are never enough resources to meet all human wants. - shortage: a temporary situation in which demand for a particular good or service is greater than the supply.

Principle of Scarcity #1: People Have Wants Wants are unlimited and ever changing. People must make choices about what they desire and what to do with resources they have.

Scarcity affects which goods or services are produced. goods: physical objects that can be bought. services: work that one person does for another for payment. Scarcity affects the choices of both the consumer and producer. consumer: a person who buys goods and services for personal use. producer: a person who makes goods or provides services.

When faced with scarcity, people and societies must make choices about allocation. When people allocate, they decide how something should be used and/or who should get something that is available. People and societies make different allocation decisions. Our economic systems are those systems which help us decide “who gets what”, and how these resources will be allocated. Capitalism, communism, etc.