Transcript 1-1

Economics: study of how people
try to satisfy unlimited wants with
limited resources.
**#1 rule of economics:
TINSTAAFL
There Is No Such Thing As A Free Lunch
**Major econ. Problem:
SCARCITY
--occurs when people do not
have enough resources to
produce all of their needs &
wants
--does not occur because
of lack of $
--ie=heart transplant
**4 Factors of Production
1. land
Must be
natural &
limited
2. capital
Must be used
for production
3. labor
The work
force (human
capital)
4. Entrepreneurs
Risk takers in
search of a
new business
Phil Knight
Nike
Evan Spiegel & Bobby Murphy
Snapchat
Pierre Omidyar
Ebay
Mark Cuban
Broadcast.com
Mark Zuckerburg
Facebook
Warren Buffett--Berkshire Hathaway
Sean Combs
Bad Boy Records
Economic Products: goods & services
that are useful, relatively scarce &
transferable
4 types of Goods:
1. Consumer
2. Capital
3. Durable (> 3 years)
4. Nondurable (< 3 years)
Service: work performed for someone else
**The Three Basic Questions:
1. What to produce?
2. How to produce it?
3. For whom is the product
being produced?
Product Partner Project!
Improve or come up with a new
product!
1. Name it
2. Draw the new product
3. Answer the three questions
what –be very descriptive and include the
type of good it is
how—how is the product going to be
made (factory, by hand, by you, by
hired workers)
for whom—who is your target consumer
**product must be school appropriate!
Product Partner Project!
Improve or come up with a new
product!
4. List and label the four factors of production
(this should be the longest part of the project—
be detailed! List your names as the
Entrepreneurs)
5. What price would you sell it?
**product must be school appropriate!
Economic Products must have:
1. Value: worth expressed in dollars & cents
**Paradox of Value: some necessities
have little value whereas some
non-necessities have higher value
--think of it as the “diamondwater” paradox
--Why?
Scarcity!
2. Utility: capacity to be useful & provide
satisfaction
--differs from one person to the next
• Wealth: accumulation of those products
that are tangible, scarce, useful
and transferable
--service is not included in
wealth (talent cannot be
transferred)