1. ECONOMICS CHAPTER 1

2. A. SCARCITY – What is it? 1.Scarcity - when there is not enough of a “resource” to meet all demand 2.Economics – the study of how people, businesses and nations make choices 3. Limited supply vs. exceeding demand Supply = the amount of a product or good that is produced at a certain price Demand = the amount of a good or service someone is willing to buy 4.Want = a thing (or something) people desire

3. 5.Needs = what people must have in order to survive 6.Good = a thing you can see, touch and buy or sell 7.Service = any kind of work a person does for others for money

4. WANTS

5. Quiz: Wants Car. Blonde woman in a bathing suit. Long legs. Sunglasses. White shoes……..

6. Quiz Questions….  What color was the car?????  What type of car was it?????

7. Needs

8. B. The Factors of Production 1. the things needed to produce goods and services a. Natural resources - things that are from the earth (or sun - solar power) b. Labor - work or human resources c. Capital - machines and tools used to produce goods and services d. Entrepreneur - a person who comes up with the ideas of goods and services and who take on the risk of starting a business

9. C. Opportunity Costs 1.This occurs every time a choice is made 2.It is defined as the “pleasure derived” or “benefit received” by getting one thing over losing the opportunity to get something else 3. This happens due to scarcity – if things were unlimited, there would be no problem!

10. Opportunity Cost….

11. D. Specialization 1. When you dedicate your time and energy to learning a certain skill or trait 2. The use of resources to produce only a single or few kinds of products and services 3. Helps cut down on becoming “too big”

12. E. Productivity 1. the amount of goods and services produced by a worker or business in a given time period 2. Capital, education and technology all play a role in productivity