2. Economics is about…
• Trying to satisfy unlimited wants
• Making tradeoffs
• Getting the most out of what we
have
3. “Wants”
•The need or desire for goods and/or
services
•They are UNLIMITED
•Divided into “Physical” wants and
“Psychological” wants
4. “Physical” Wants
• Also referred to as “Needs”
• Things that are necessary to
sustain human life
• Examples: air, water, food,
clothing, shelter
• Determined by where we live.
(how?)
5. “Psychological” Wants
•All other wants that are not
essential to sustaining life
•Examples: ipods, brand name
clothing, a boat, trips, etc.
6. “Goods”
• Tangible or “concrete” items
that satisfy wants
• Examples: food, clothing, cars,
etc.
7. “Services”
• Intangible items that satisfy
wants
• Consumed at the time of
production
• Examples: medical check-up,
hair cut, concert, etc.
8. “Resources”
• Things used to produce goods
and services.
• Divided into “Natural”,
“Capital”, and “Human”
Resources
• They are LIMITED
9. “Natural Resources”
• Materials or substances that
occur in nature and can be
used for economic gain
• Examples: water, land, forests,
minerals, oil/gas, even sunlight
and wind!
10. “Capital Resources”
• A “good” that is used in the
production of other goods
• Examples: factories,
machinery, equipment, tools
11. “Human Resources”
• The skills and efforts of people
used in the production of
goods.
• Example: employees
12. Example: Hockey Stick
• Wood used to make the hockey stick =
Natural Resource
• Saw used to cut the wood = Capital
• Resource
• Person who operates the saw =
• Human Resource
13. “Scarcity”
• The core of Economics
• Simply: because wants are
unlimited and resources are
limited, there will never be a time
when all wants are satisfied.
• There has to be “want” in order
for scarcity to exist.
14. Examples
• Canned snow for sale in Antarctica
= no scarcity because no one
would want it
• Having $1.00 to buy lunch with =
scarcity because you probably
won’t be able to satisfy your
hunger (want) with only $1.00
(resource)
15. Value
• The worth of something
determined by:
• desire
• usefulness
• quantity of resources used to
produce
16. Economics is…
The study of human
activity involved in using
scarce resources to
satisfy wants.
