limited productive resources and unlimited wants preparing to teach hs economics 2014
TRANSCRIPT
Limited Productive Resourcesand Unlimited Wants
Preparing to Teach HS Economics2014
Why are wants unlimited?
The Pig Principle“Generally speaking,
people prefer n+1 units of a good to n units of the same good.”
Why are goods limited?
• Most productive resources are limited• Productive resources are– Land– Labor– Capital– Entrepreneurial ability
Fundamental Economic Problem
Limited Productive Resources…
… are Used to Produce Goods…
…to Satisfy Society’s Unlimited Wants
Allocation questionHow much of each good should be produced?
Production questionHow should the goods be produced?
Distribution questionWho should get the stuff?
