1. IGCSE Economics Unit 1 – The Basic Economic Problem and Factors of Production

2. Learning Outcomes Define the nature of the economic problem Define the factors of production

3. What is Economics? A social science The study of the interactions between: Humans Institutions Organisations Natural Environment Social environment Looks at the decisions and choices that are made

5. NEEDS AND WANTS

6. What do we need and what do we want? Make a list of 10 items that you need Make a list of 10 items that you want What is the difference between a need and a want? How many needs and how many wants do you have?

7. Will there be a difference between your needs and wants and those of these children? Why?

8. Why do I want what I want? The creation of wants!! I’m going to show you some slogans used by businesses that aim to create wants Can you recognise what brands they are trying to sell?

9. Name that brand? 1.American by Birth. Rebel by Choice. 2.There is no substitute. 3.Save Money. Live Better. 4.Impossible is Nothing. 5.Between love and madness lies obsession. 6.Quality never goes out of style. 7.The Happiest place on Earth 8.Because I’m worth it 9.What’s the worst that could happen? 10.Taste the Rainbow

10. Your turn…. In pairs Try to write down 4 catch phrases or slogans used by advertisers

11. Key Points: Needs are the things that we require for survival. These needs are finite Wants are the additional things that people would like to have. Wants are infinite.

12. GOODS AND SERVICES

13. Satisfying Needs and Wants In order to satisfy the needs and wants of consumers businesses will make PRODUCTS Products are categorised into Goods and Services

14. The difference between a good and a service? Are all products a pure good or a pure service?

15. Key Points Goods and Services are the products made to meet people’s needs and wants Goods are tangible Services are intangible In order to make Goods and Services resources are required

16. PRODUCING GOODS AND SERVICES

17. Production of Goods and Services Resources will be required. Lets have a think about what these resources might be?

18. What resources are needed to make this pencil?

19. FACTORS OF PRODUCTION

20. Good or Service Land Labour Capital Enterprise Why are each of these factors of production important?

21. Task Can you now add any more resources to your list? Categorise the resources in your list into the four factors of production

22. Task – sort these resources for making and selling orange juice into the 4 factors of production Fertile soil Squeezing machines Orange Pickers Packaging machines Package designers Calculators Water Oil Lorries Printing machines Orange Trees Power Stations Coal Warehouse workers Lorry drivers Wood Telephones Advertising executives Shops Ships Crew Factory Buildings Drinks tasters Insecticide sprays Oranges Roads Accountants Shop Assistants Dock Workers

23. Using inputs (resources) to make outputs (goods and services) to satisfy the needs and wants of consumers Production

24. Using up goods and services (products) to satisfy consumers’ needs and wants Consumption

25. Question…. Is it possible to produce enough goods and services to satisfy the needs and wants of everyone? Why?

26. Human wants are unlimited but resources are limited This is called….. The Basic Economic Problem

27. Task Look at the headlines on the next slide. For each one answer the following… a.What is the limited resource b.What factor of production would this fall into c.What are the implications of this shortage? d.What could be done?

28. Task

29. SCARCITY

30. Task – 2 mins In pairs. Write a definition for the word ‘Scarcity’

31. Scarce Resources Are all of these resources scarce? Can you rank them from the least to the most scarce?

32. Questions? What happens to the value of resources as they become more scarce? Why? Can you think of some resources that are not scarce? Should we use scarce resources?

33. Key Points Scarcity in economics refers to any resource that is not unlimited Goods which are scarce are called Economic Goods Resources that are not scarce are called Free Goods The more scarce a resource is, the more valuable it becomes in monetary terms