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 & Goods / Services 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 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)

5. Scarcity Decision Making Opportunity Cost Human Wants > Resources = Scarcity Decision Making – cant have everything because of scarcity Opportunity Cost – the decisions will mean we have to give up something to gain something else (e.g. Talon wants to go to Hong Kong during the March Break or have a new lap top computer)

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