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Chapter 1 Section 1
As Consumers, what
choice does scarcity force
you to make?
The Fundamental Economic Problem
Scarcity is the condition that results from society
not having enough resources to produce all the
things people would like to have
Economics is the study of how people try to
satisfy what appears to be unlimited and
competing wants through the use of relatively
scarce resources
Needs and Wants
Need—basic requirement for survival
Want—way of expressing a need
Food, clothing, and shelter
Food—pizza, clothing—tommy hilfiger
“There is No Such Thing as a Free Lunch”
Because resources are limited—everything we do has
a cost
Three Basic Questions
WHAT to produce
Society must decide where to put its resources (military
equipment, housing, food, clothing, etc.)
HOW to produce
Society must decide mass production or hard labor
Ex. Housing – What type: Low to High Income houses
Ex. Lots of equipment few workers or Less equipment or workers
FOR WHOM to produce
Who receives things that society produces
Ex. Who gets the houses that were produced???
Graphic Organizer
Within Your groups:
With your group, Create a Graphic organizer about
Economic Choices
List and describe the economic choices every society must
That’s All for Today
“There’s No Such Thing
as a Free Lunch”
Please explain what this
Factors of Production
Required Resources to produce things we would
like to have:
 Natural
resources—fertile fields, forests,
minerals, livestock, climate
 Tools, equipment, machinery used to produce
goods and services
 Financial capital—money used to buy the
tools and equipment
People abilities, efforts and skills
Risk-Takers who do something new with resources
in search of a profit
New Business owners who bring new product to the
When all of the factors of production
are present - production can take place
Four key elements to the study of Economics
Describing economic activity—GDP is best measure
Why things work and how things happen
Gross Domestic Product—the dollar value of all goods, services, and
structures produced in 1 year
Communicating why and how things work
What is going to happen in the future