Scarcity and Scarcity and the Factors of Productionthe Factors of Production

Chapter 1, Section 1

Needs vs. WantsNeeds vs. Wants

Need – Something that is necessary for survival.

Want – An item that we desire but that is not essential to survival.

NeedsNeedsFood

Shelter

Clothing

Education

ScarcityScarcity

Scarcity – Always exists. There’s never enough time, money, resources, etc.

Shortage – Temporary. Natural disasters, long term drop in resources, etc.

Economics – study of how people seek to satisfy their needs and wants by making choices.

Factors of ProductionFactors of Production

Factors of Production – resources used to make goods and services

1.Land - Natural Resources2.Labor - Effort devoted to a task3.Capital - Physical (buildings & tools) Human (knowledge)

LandLand

LaborLabor

CapitalCapital

CapitalCapital

LandLand