1.1

The Economic Problem

Wants and Needs

Economic Choices• Economics is about making ______________.• ____________________ is the condition facing all

societies because there are not enough productive resources to satisfy people’s unlimited wants .

• ___________________ __________________, or factors of production, are the inputs used to produce the goods and services people want.

• Because productive resources are scarce, ____________ and ______________ are scarce too.

• Making choices means you must pass up some ______________________________.

• ________________________ examines how people use their scarce resources to satisfy unlimited wants.

“Although your wants and desires are virtually unlimited, the productive resources available to

satisfy these wants are scarce.”

• ______________________________ is the study of how people use their scarce resources to satisfy their unlimited wants

Productive Resources• Are also called _________________ of

production, inputs or resources. They are broken down into 3 categories:

• ___________ _______________ is the broad category of human effort, both physical and mental, used to produce goods and services. – __________ is the most important human resource– An __________________ tries to earn a profit by

developing a new product or finding a better way to produce and existing one.

Productive Resources (continued)• ___________ __________ are also called “gifts

of nature,” including land, forests, minerals, oil reserves, bodies of water and even animals.–_______________________ resources can be

drawn on indefinitely –______________________ resources do not

renew themselves, so they are available in limited amounts.

• _____________ ____________________ are also called capital goods. They are creations used to produce goods and services.

Goods and Services• A ___________________ is tangible –

something you can see, feel or touch.• A ______________________ is intangible,

or not physical.