basic economics:

Factors of Production!

Land, Labor Capital (Human & Physical)

We fill our wants and needs with our means...but!

How many want do we actually have?

As you get older your wants will change.

What was the difference between your wants and that of your parents? why?

What happens to your wants as technology and opportunities increase?​

Wants tend to be seen as unlimited or infinite

The Scarcity Problem

• We have unlimited wants.... but our resources are limited. We do not have all the resources to produce everything we want.

• Scarcity forces consumers, producers, and governments to make some difficult choices.

• Example: Nearly every teenager wants a PS5 right now. The producers only have enough resources to put just a few on the market right now.

What are goods and services?

​Services...

Services are 'intangible' unable to be touched. They are tasks performed for you for example the person serving food behind the counter at McDonalds.

McDonalds...one of the biggest fast food companies in the world...also the most recognised brand in the world

How to solve the Economic Problem?

​Not really solving it...just making decisions

Depending on our philosophy we will either decide to give control of our resources 100% over to the Govt and let them decide (Planned economy). Or give complete control over to the market and let supply and demand decide (more on these ideas later). Or we could mix and match and have some govt and some market (Mixed economy).

most modern economies are mixed economies

Opportunity cost was what again?

What does it mean? can you apply it in a real life situation?

Multiple Choice

It is your second choice-what you give up when you make a decision.

• Choice

• Opportunity Cost

• Scarcity

• Shortage

The 4 Factors of Production

• Natural: Land, raw resources (water, plants, animals, etc.)

• Human: People (Labor)

• Capitol: Machinery, Tools, and Buildings used to produce

• Entrepreneurship: new business which combines other factors to make a profit.

Production

Production is the combining of resources/factors of production (natural, human, capitol, and entrepreneurship) to make goods pr provide services.

What goods and services are produced is determined by what resources are available and consumer preferences.

Consumption

This is the using of goods and services. Consumer preferences and price determine what is purchased and consumed.

Capital

• Man Made TOOLS used to produce goods and services.

• KNOWLEDGE and SKILLS acquired via education and experience that make it possible for humans to produce goods and services.

Labor

• the actual work that goes into creating a good or service

• Physical effort.

Human resource Capital

• The knowledge and skills people bring to the table.

• Training, education, experience.

• health, strength, public speaking ability.

Physical Capital

• Tangible items used to make goods and services

• TOOLS

• Buildings

• Computers/Machines

• Money used for investment (Capital Contributions, for example)

Entrepreneurship

• The ideas to create new goods and services

• The ideas needed to create existing goods and services in a better way.

Multiple Select

Which of these goods are also needs?

Check all that are true.

• food

• shelter

• toy

• book

Multiple Choice

Economics is the study of how people make choices about ways to use _______________ resources to fulfill their unlimited wants and needs.

• Limited

• Unlimited

• Natural

• Man-made

Multiple Choice

The definition of Scarcity is...

• An unlimited amount of resources to meet limited wants and needs

• A limited amount of resources to meet unlimited wants and needs.

• When people use time and energy to create events

• A city where individuals commit themselves to unlimited wants and needs

Multiple Choice

Bill Gates is an example of...

• Natural Resources

• Labor

• Entrepreneur

• Capital

Multiple Choice

Cashiers at McDonalds are examples of ….

• Natural Resources

• Labor/ human resource

• Entrepreneurs

• Capital