Scarcity and the Factors of Production

1. SSccaarrcciittyy aanndd
tthhee FFaaccttoorrss ooff PPrroodduuccttiioonn
Chapter 1, Section 1

2. Need – Something that is necessary for
survival.
Want – An item that we desire but that is
not essential to survival.
NNeeeeddss vvss.. WWaannttss

3. NNeeeeddss
Food
Shelter
Clothing
Education

4. Scarcity – Always exists. There’s never
enough time, money, resources, etc.
Shortage – Temporary. Natural disasters,
long term drop in resources, etc.
Economics – study of how people seek to
satisfy their needs and wants by making
choices.
SSccaarrcciittyy

5. Factors of Production – resources used to
make goods and services
1.Land - Natural Resources
2.Labor - Effort devoted to a task
3.Capital - Physical (buildings & tools)
Human (knowledge)
FFaaccttoorrss ooff PPrroodduuccttiioonn

7. LLaanndd

8. LLaabboorr

9. CCaappiittaall

10. CCaappiittaall

11. LLaanndd