Standard 1.2-Explain why the productive
resources of land, labor and capital are
limited.
Opening:
Complete Study
Guide 1.1.
Closing:
Discuss closing
questions.
Work Period:
• Island Simulation
• Scarcity and Factors of
Production PPT and Notes
Homework:
Guided Reading 1-2
Island Simulation
• 1A
– 2 groups of 5
• 3B
– 2 groups of 4, 1 group of 5
Scarcity and the Factors of Production
In this lesson, students will be able to define the
following key concepts:
Scarcity
Economics
The Factors of Production
Entrepreneur
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In a magical world, there is no need for
Economics but we live in a world of
Scarcity. We need Economics.
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Scarcity
• Scarcity is the realization that our
wants and desires are unlimited but
the world’s natural resources are
limited.
• In other words, we always want more
than we have.
• We cannot wave a magic wand to get
everything we desire.
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Wouldn’t it be nice if we could
just wave the magic wand and
multiply our dollars?
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Economics
• Due to scarcity, we cannot have
everything we want or need.
Therefore, we have to make
choices.
• Economics is the study of the
choices we make.
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Which will you choose in a world
of limited resources?
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Look at your note handout.
Make a list of 5 choices
you’ve made in the last 24
hours.
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What is a need?
What is a want?
List examples on your note
handout.
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Of course, we make choices about
the goods and services we purchase
based on what we need versus what
we want.
What is a good? What is a service?
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What happens when a shortage
occurs?
Is a shortage the same as
scarcity?
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The Factors of Production
• Whenever we make a good (an object) or
a service (an action performed), we need
the Factors of Production.
• The Factors of Production are:
Land ( Natural Resources)
Labor (Paid Workers)
Capital (Money and Machines)
Technology (Body of Knowledge)
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Name the Factor of Production addressed
in this diagram.
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Entrepreneur
• An entrepreneur is a person who puts
together land, labor, and capital to make
new businesses.
• If your mother opened her own business,
she is an entrepreneur.
• Bill Gates is also an entrepreneur.
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Questions for Reflection:
•
•
•
•
•
•
Define scarcity.
Explain how scarcity affects your daily life.
What is Economics?
Why does Economics exist?
Describe the Factors of Production.
Do you want to be an entrepreneur?
Explain your answer.
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