1.1 Scarcity

Essential Question:

What are scarcity and economic resources?

Learning Objectives

MOD-1.A
- Define scarcity and economic resources
MOD-1.A.1
- Individuals and societies are forced to make choices because most resources are scarce.

People's needs, the absolute necessities of life, are few: air, water, food, clothing, and shelter. But most people want much more than those basic needs.

People have learned to put resources to work to produce goods and services that satisfy many of their wants, things that are desirable but not necessary for existence.

The basic problem of economics is the gap between limited resources and unlimited wants. This gap refers to scarcity. It requires people to make choices, decisions about how to use resources in order to satisfy basic needs and as many additional wants as possible.

Economics is the study of how people and societies use limited resources to satisfy their unlimited wants.

Fundamentals of Economics

Society must try to allocate, or distribute, its resources in such a way that they get the most for its money. Along the way, every society needs to answer some fundamental Economic Questions:

WHAT goods and services should be produced?
HOW should they be produced?
WHO should receive the goods and services that are produced?

Scarcity and Choice

Economics is about the choices all people must make in their daily lives. Why is it always necessary to make a choice between either this or that? Why can't people have everything they want? Economists try to answer these questions by discussing scarcity.

Economic Resources

Economic resources, or factors of production, are the things that go into making of goods and services. These are natural resources, human resources, and capital resources, sometimes referred to as land, labor, capital, and entrepreneurship. Producers, the people and institutions that make and offer goods and services, combine these factors to create their products as efficiently as they can.

Topic Vocabulary

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