Chapter 1 Section 1:Economics and Scarcity

Chapter 1 Section 1:Economics, Scarcity and the Factors of Production

SS.912.E.1.1 Identify the factors of production and why they are necessary for the production of goods and services.

What is Economics?

• The word Economics is a Greek compound word.

• The two parts are "eco" and "nomic"

What is the meaning of "Eco"

• Home (but more like home planet)

• Has come to mean earth

What is the meaning of "Nomic"

• Comes from Greek "nomos"

• It means accounts.

• Accounts are a way of organizing and categorizing resources.

Put them together, and you get economics or organizing the home.

Economics is caused by Scaricty.

• Our lives are dictated by scarcity.

• If there were unlimited resources, people wouldn't worry about food, clothes, homes or anything else needed to live.

• We do not have enough resources to provide everyone on earth a luxurious life.

An example of Scarcity

• The biggest blue dot is all water on earth.

• The next blue dot is liquid fresh water.

• The smallest blue dot shows all the fresh water in lakes and rivers.

• This is all the water that is shared by the nearly 8 billion people on earth.

Scarcity forces consumers to make a choice:

• What do I need to live?

• What do I want that will make me happy?

It also causes producers to make choices. These are called the 3 basic questions.

• What will I/we make?

• How are I/we going to make it?

• Who is this for?