Scarcity and Choice

California State Standard 12.1: Students understand common economic terms and concepts and economic reasoning.

Do Now 1/31/13

Consider John Muir High school. On a separate sheet of paper, write down one or two examples of EACH economic term that can be found at Muir. Who are the consumers? Who are the producers? Etc… Consumers Producers Goods Services Natural resources Human resources Capital goods Consumer goods

Reminders

You will have a vocabulary quiz on Tuesday 2/12/13

You are responsible for all the terms from the first 2 economics lessons

=Limited

Economic Resources

Unlimited Wants+ Scarcity

Scarcity is the most basic problem of economics!It forces people to make choices. You can’t have it all, so you must make decisions about how to use resources effectively.

Unlimited Needs and Wants

Limited Resources

Scarcity

• How to allocate resources

• How to increase productivity

• How to increase efficiency

• How to allocate resources

• How to increase productivity

• How to increase efficiency

_______________ Allocate means to distribute

___________

Productivity is the level of output that results from a given level of input. •The measure of efficiency

_______________Efficiency is getting the most from society’s scarce resources.•Making the most of what you have.

All choices involve trade-offs!!•Trade-offs are all the sacrifices you make when you make a choice.

People Face Tradeoffs

There is no such thing as a free lunch!

To get one thing we like, we usually have to give up another thing we like

And people make choices based on the kinds of sacrifices, or trade-offs, they have to make.

College may cost you $30,000, but it would have cost LeBron James $13 million

“Guns and Butter” – for every dollar spent on defense, that’s one less dollar we can spend on personal goods at home.

Tradeoffs in Society

Laws meant to reduce pollution raise costs.

Tradeoff – cleaner environment vs. higher income

Pollution

Every decision involves trade-offs.

The Opportunity Cost is the most valuable alternative, or trade-off, you forgo when you make a decision.

Tradeoffs in SocietyThe Biggest Sacrifice

Prom?

Your best options: