Lesson 1.1

• Explain why we have scarcity

• List the questions all societies face

• Identify the Factors of Production

• Describe opportunity costs and trade-offs

• A Need is a basic requirement for survival, such as food, clothing and shelter.

• A Want is simply something we would like to have but is not necessary for survival.

​"the state of being scarce"

​Scarcity is the condition that results from society not having enough resources to produce all the things people need and/or want.

​Our needs and wants are usually expressed in terms of economic products - goods and services that are useful, relatively scarce and transferable to other

​Durable Goods - ones that last 3 years or more when used on a regular basis. (Tools, electronics, and automobiles)
Nondurable Goods - items that last fewer than 3 years when used on a regular basis (Food, writing paper and most clothing items)
Consumer Goods - shoes, a shirt, or an automobile intended for final use by consumers, or individuals.
Capital Goods - tools or goods such as machinery or equipment that are used by businesses to produce other products.

​Work that is performed someone for payment.

​Stuff like haircuts, home repairs and entertainment. Lawyers, bankers, doctors and teachers also provide services.

​To have value, it must also have Utility - the capacity to be useful and provide satisfaction

​The Utility of a good or service may vary from one person to the next. One person may find epic satisfaction in attending a concert; another person may get very little or no satisfaction.

​Example: Many of you would be willing to pay hundreds of dollars for a pair of Nike "Dunks"... How many of you would be willing to pay the same amount for a new golf club?

​Paradox of Value