SSEF1:★Explainwhy limitedproductiveresourcesand unlimited wants resultinscarcity, opportunity costs, andtrade offsfor individuals,businesses, and governments★A.definescarcityas a basiccondition that exists when unlimitedwants exceed limitedproductiveresources.
Why do we studyEconomics?★Scarcity- There is not enough resources foreveryone to have what they want. In order fora resource to be scarce it must:○Be limited○Be desirable○Have multiple uses★UNLIMITED WANTSand LIMITED RESOURCES=Scarcity○So… we have to make choices...
StandardSSEF1.b.Define and give examples of productiveresources (i.e. factors of production): naturalresources (i.e. land), human resources (i.e. laborand human capital), physical capital andentrepreneurship.
Factors of Production:Natural Resources★Land: All natural resources that are used toproduce goods and services○Ex: Wheat, soil, iron, ore, trees, water,animals
Factors of Production:Human Resources★Labor: Any effort a person devotes to a taskfor which that person is paid★Human Capital: Knowledge and experience aperson brings with them to a job
Factors of Production:Physical Capital★Physical Capital: Any human-maderesourcethat is used to create other goods andservices○Ex: Tools(hammer), Factory(used to makeproducts), Restaurant(used to make food)
Factors of Production:Entrepreneurship★Entrepreneurship(on-tra-pra-new-er-ship):Ambitious leader who is motivated by profitto combines all other factors of production(land, labor, capital) to create their ownbusiness
SSEF1:Explainwhylimited productive resourcesand unlimited wants result in scarcity,opportunity costs, and trade offsfor individuals,businesses, and governmentsSTANDARD
Trade Offs and OpportunityCost★Trade Offs = Everything you give upwhen you make a decision★Opportunity Cost = Best alternativegiven up
Standard★SSEF2 The student will give examples ofhow rational decision making entailscomparing the marginal benefits and themarginal costs of an action.a. Define marginal cost and marginal benefit.b. Explain that rational decisions occur when the marginalbenefits of an action equal or exceed the marginal costs.c. Explain that people, businesses, and governments respond topositive and negative incentives in predictable ways
Rational Decisions★You make a rational decision when marginal benefits are greaterthan or equal to marginal costs○In Economics, Marginal means additional★Marginal benefit is the additional satisfaction someone gets froman action★Marginal cost is the additional amount someone pays forsomething
Positive Incentive★Positive Incentive = A reward that makes youwant to do something○Ex: Practicing everyday to win atournament○Ex: Studying to make an “A” on a test