1. Introduction to Economics Johnstown High School Mr. Cox Resources, Scarcity, and Surplus

2. Bellringer Why is jewelry (diamonds, gold, gems, etc) such an expensive good? Why are other goods cheap? How does scarcity of resources impact economic market factors and decision making? Essential Question

3. Another Economics Definition “The study of the use of scarce resources which have alternative uses.” Scarce or Scarcity Definition: refers to limitations—insufficient resources, goods, or abilities to achieve the desired ends Goods Manufactured or produced items for personal or commercial purchase Examples? Services Actions of laborers, skilled or otherwise, to be purchased for personal or commercial purposes Examples?

4. Why do we have Scarcity? We have Unlimited Wants and Needs But Limited Resources Create Scarcity So we need to make Choices What to produce How to Produce For Whom to produce

5. Scarcity Cont’d Who produces? Who decides? Producer - A person who makes goods or provides services. Government Business Individual Consumer - A person who buys a good or a service for his/her use What is the relationship between consumers and producers in regards to scarcity of resources and wants?

6. Scenario: Choices of Scarce Resources You are a member of a surgical team in a leading U.S. hospital. As a team, you must decide which patients should receive liver transplants as donated organs become available. Recently your hospital received an organ donation from the family of an accident victim. As best as your team can determine, each of the three candidates' bodies would accept the liver without major threat of rejection. The cost of this operation, surgical fees and hospital care, would come to approximately $50,000. Decide which patient will receive the liver transplant operation. Identify the criteria you used to evaluate each patient.

7. Potential Recipients 1. A 40-year-old male construction worker with a wife and five children. Until recently, he provided most of the family's income. Now his wife works at part-time jobs to earn the family income. His insurance would cover about one-half of the costs of the operation and post-operative medical care. 2. A 30-year-old female working as a sales representative for the regional telephone company. She has no family. She plans to marry as soon as her health improves as a result of the liver transplant. Her health insurance will cover the costs of the operation. 3. A 45-year-old former pro-football player with a wife and children. His health insurance will cover the cost of insurance.

8. What economic principles apply to this situation? Scare resource? Factors in decision making? Insurance coverage? Cost of labor losses? Personal losses?

9. Essential Question How does scarcity of resources impact economic market factors and decision making? Homework