LEARNING TARGETS
• To understand the concept of scarcity,
and give real-world examples of it.
• To understand and give real-world
examples of the definition of Economics
• To be able to identify real-world
examples of Allocation of Resources.
Introductory Econ Ideas
• Fundamental issue is Scarcity
• Something must always be given up
• T.I.N.S.T.A.A.F.L.
• Economics: Study of limited resources
trying to satisfy unlimited wants
• People always want more
• Pig Principle
3 Questions
• 3 Big Questions all economies must
answer:
• What to produce?
• How to produce it?
• For whom is it being produced?
ALLOCATION of
RESOURCES
• If we assume resources are
scarce, how do people,
societies, or countries
ALLOCATE, or distribute,
those resources?
Allocation of Resources
Econ is not about eliminating
scarcity, it’s about dealing with it.
Random Draw
• Lottery
• Ex. Drawing for shelter beds, Vietnam
Draft?, Powerball
FYI: Your odds of winning the Powerball are 1 in 950,000,000
Personal Characteristic
• Age, weight, ancestry, alphabetical by
name
• Ex. Soc. Sec. benefits, hearts, choosing
your fantasy football team
FYI: There are only 450 total roster spots in the NBA
Performance Based
• By score, race results, Qty. of sales, #
of push-ups
• Ex. Grades, Promotions, awards
First Come First Served
• Whoever’s there first
• Ex. Stop signs, many goods in the former
USSR, most legal immigration to the US
Fiat
• By choice of the those that own the
resource
• Ex. Most of what parents give to children, a
country’s dictator, teacher
Voting
• Majority rule
• Many government decisions, Prom royalty
Willingness and Ability to Pay
• The amount of cash, goods, or services
you are willing to sacrifice
• Ex. Most everything in the market economy
Other
• Combination of others
Allocation Systems
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•
•
•
•
•
•
Random
Personal Characteristics
Performance Based
1st come, 1st served
Fiat
Voting
Willing and Able
Importance of allocating scarce resources
LEARNING TARGET- To identify and give real-world
examples of the 4 Factors of Production
Scarcity of
Productive Resources
a.k.a. Factors of Production
Produce
Goods and Services
Satisfy society’s wants
-Human, Capital, Natural, and Entrepreneur
Human
• AKA - Labor
• People with their mental and physical
abilities
Capital
• Items that aid production
• Ex. Tools, machines, factories
Natural Resources
• AKA - Gifts of Nature
• Anything we canNOT make ourselves
Entrepreneur
• The coordinator, the risk-taker
• Ex.
*This is a very important part of our free-market
economy
In-class activity
• You are to pick an item and describe/show the productive
resources that go into this item.
• Do this by putting an image of your good into the middle of a
piece of blank paper with a label.
• Then in each corner place in image of some of the resources
that go into this good (for example one corner will have a
drawing of workers with a written description of the workers and
the impact on this good).
• Do this by yourself first, then share with
your partner, then share with 1 other
pair.
• In your small groups, pick an item
(good) and discuss the 4 Factors of
Production that go into it.
Journal #1
NPR Poverty Article
• After listening to the piece, respond to
the following:
• How do you feel we should define “poverty”?
What new economic knowledge did you take
from this piece?