The document discusses key economic concepts including scarcity, wants vs needs, renewable and non-renewable resources, and production possibility frontiers (PPF). It instructs the reader to make lists of wants and needs with prices, compare total to income, and add new economic terms to a dictionary. Scarcity is introduced as resulting from limited resources and unlimited wants. Renewable resources can regenerate with time unlike non-renewable resources. PPF graphs show the maximum combinations of two goods that can be produced with limited resources.

1. To begin...
• Make a list with two columns, ‘wants’ and
‘needs’.
• In each column, try and think of ten things
that you, right now in your life, want or need,
and write a price (estimate) for these.
• Total the price of this list at the bottom.
• Then below this total, write down your
monthly income...

2. Words, Phrases, Terms and
Expressions...

3. Your Economic Dictionary
• Over the course of this year, there will be words
and phrases that will be ESSENTIAL for you to
know.
• During a lesson, where a new term is introduced,
you will add it to a separate book/page/file that
you will make, which will become your Economic
Dictionary.
• This will have two definitions, my ‘official’
definition, and some explanation by you.
• Keep this up to date and feel free to USE IT during
lessons.

4. For Today
• Scarcity
• The Economic Problem
• Renewable and Non-Renewable Resources

5. Why do we do Economics?
• The word economics comes broadly from the
Greek meaning ‘management of the
household’. What we take this to mean today
is the management of resources, and the
‘household’ is the perspective we take, be it a
single firm, a nation or the global economy
• The reason we need to consider the
management of these resources is the result
of the economic problem.

6. The Economic Problem
• This is the central issue of economics. Put simply,
it states that we, as human beings, have an
unlimited number of things that we want or
need. Unfortunately, we live in a world that has
limited resources.
• As a result, we are in a potentially difficult
situation where we want more than we can have.
• Economics is the result, and studies how this
problem can best be managed (NOT resolved)

7. Unlimited Wants and Needs
• Go back to the list you made at the start of
this lesson. Is it exhaustive?
• If I offered you £20, with no catch, would you
take it? And if I offered you another....

8. Scarcity
• Now look at the difference between the two
figures, you all probably have a bigger wishlist
than the money you get can afford.
• This is true not just for individuals, but for
firms (companies), countries, and the world as
a whole.
• The important term we use to describe this
lack of resources is ‘scarcity’.

9. Renewable and Non-Renewable
• However, some resources are ‘infinite’, in that
given time, they can be renewed.
• Examples...

10. Putting this into a graph
• Economists are rarely satisfied with stating
what is often obvious. Instead, we need to
demonstrate these ideas using a graph.
• Today, we will look at representing our wants
and needs versus our actual income.
• If I gave you £10, and fish is £2 a piece, and
chips are £1 a piece, come up with THREE
combinations of fish and chips that I could
buy.

11. The PPF
• PPF = Production Possibility Frontier.
• Considers how much of TWO distinct products
can be purchased with a set budget. The PPF
itself is the line on the graph, and the line
shows the BEST combination of resources.
• An example...

12. 0
1
2
3
4
5
6
0 2 4 6 8 10 12
PPF for Fish n Chips
With a Ten Pound note, this person can buy a range of different
combinations when Fish is sold for £2 and Chips are sold for £1. Looking
at the graph, which axis do you think is Fish, and which is Chips?

13. 0
1
2
3
4
5
6
0 2 4 6 8 10 12
PPF for Fish n Chips
ANY of the points (stars) under and to the left of the PPF are
valid, but it is the ones that are ON the PPF that are the most
efficient, and therefore most preferred.