1.1 Introduction to Economics: Scarcity and Choice

Because it helps us understand how resources are allocated

Because it explains why everything is free

Because it eliminates the need for choices

Because it only applies to poor countries

A shortage is temporary and can be fixed, while scarcity is a permanent condition due to limited resources.

Scarcity only happens in poor countries, while shortages happen everywhere.

A shortage is caused by unlimited wants, while scarcity is caused by poor planning.

Scarcity is about money, while shortages are about goods.

Scarcity exists because resources are limited and wants are unlimited.

A shortage is the same as scarcity.

Scarcity can be completely eliminated by efficient use of resources.

Scarcity requires individuals and societies to make choices.

A need is something essential for survival, while a want is something you would like to have but can live without.

A need is something you buy for fun, while a want is something you must have.

A need is always more expensive than a want.

A want is something you must have to survive, while a need is optional.

Groceries, clothes, house

Football, video game, phone

Phone, house, football

Groceries, video game, sky

Materials from which goods and services are made

Tools used to build houses

Money used to buy things

People who work in factories

Land

Timber

Oil

Machines

Flour

Paper Plates

Oven

Cheese

Pizza oven

Cash register

Paper Plate

Re-usable napkins

Microeconomics studies individual units, while macroeconomics studies the economy as a whole.

Microeconomics focuses on government policies, while macroeconomics focuses on businesses.

Microeconomics deals with international trade, while macroeconomics deals with local markets.

Microeconomics is about unemployment, while macroeconomics is about inflation.

Water

Sun

Machinery

Animals

A tractor used on a farm

A worker's knowledge gained from training

A factory building

A cash register

Someone who provides labor for a business

Someone who combines other factors of production to create goods and services

Someone who only invests money in a business

Someone who only manages employees