1. Chapter 1 Section 2 Scarcity and Choice Pages 8-10

2. Objectives Determine why scarcity is a basic problem of economics Identify the issues that producers must address to distribute resources. Explain why producers study productivity.

3. Scarcity Suggest a number of natural resources that are considered scarce in our community or state. Why is that resource(s) scarce?

4. Scarcity Scarcity is a condition caused by the combination of limited economic resources and unlimited human wants. How do people respond to scarcity? What kind of choices do local governments, communities, or families must make in dealing with scarce resources?

5. Activity Name several large, successful national or multinational corporation. What choices did these corporations make that helped them grow and become successful?

6. Activity Continued Why do you think this company decided to produce the goods and services that it produces? Who is the company’s intended marker? What natural, human, and capital resources does that company need and use? Are any of these resources extremely scarce or expensive?

7. Activity Continued What methods do you think the company might use to save money while producing quality goods as quickly as possible? Why do you thin this company is successful?

8. Identifying Economic Questions When limited amounts of products or resources are available, people have to decide on how to allocate, or distribute these resources. To allocate resources you must address three basic economic questions – What to produce, – How to produce, and – For whom to produce.

9. Productivity Society works to make sure that its resources are used as effectively as possible. Scarcity forces us to find ways to use resources wisely. ( i.e. oil/energy) Productivity-level of output that results from a given level of input. Efficiency-which is the use of the smallest amount of resources to produce the greatest amount of output.

10. Productivity Division of Labor-assigning a small number of tasks to each worker. Specialization-focusing on one activity the worker gains an expertise of their assigned task. Another option is mechanization. This is when workers are replaced by machines that work longer and faster.

11. Activity Specialization and Division of Labor Working with a group of two to three people you are going to design your own assembly lines to build products of your choice. They can be products that you invent or ones that already exist. You will draw each task required in production of a flow chart, illustrating the principles of specialization and division of labor used to increase productivity.