2. Scarcity and Decision Making CIE3M1 The Individual and the Economy Mr. Nicholson

3. Wants  Physical Wants – needs that are necessary to sustain life (e.g. food, clothing, shelter)  Psychological Wants – wants that are not essential to sustain life (e.g. gold jewelry)

4. Resources  Human Resources – labour needed to produce goods and services (e.g. teacher)  Capital Resources – non-human processed resources used to produce goods and services  Natural Resources – land and all unprocessed non-human resources used to produce goods and services

5. Goods / Services  Goods – concrete visible things that satisfy human wants and that last a period of time  Services – invisible things that cannot touched or seen (e.g. concert)

6. Scarcity  Decision Making  Opportunity Cost  Human Wants > Resources = Scarcity  Decision Making – can ’ t have everything because of scarcity  Opportunity Cost – the decisions will mean we have to give up something to gain something else (e.g. Katie wants to go to Europe during the October Break or have a new lap top computer)

7. Summary  Resources – Human / Capital / Natural  Wants > Resources = Scarcity  Scarcity  Decisions  Opportunity Cost  Opportunity Costs – Goods & Services

8. Application  Act Sht. 1-1  Building Your Skills pgs 5 – 6  Review pg. 6