1/8/2013, Scarcity

• Agenda1. Warm Up #12. Desert Island

Nightmare3. Notes: Scarcity4. Pictionary: Vocabulary

Review5. Spending Pie Chart

• Homework– Study for Quiz #1

Thursday

SWBAT examine the role of scarcity in the economy

Warm Up #1• There are 2 kinds of people

in this world:

– Type A: “I carry a canvas satchel because it’s cheap and they were selling them at WalMart for $5.”

– Type B: “I want the limited edition Louis Vuitton from the 2010 fall collection. They only made 500 of them. I NEED IT!”

• Which one are you? Explain.

Desert Island Nightmare

• You are a scientist on a plane with 29 other passengers– 20 adults– 10 children

• Your plane crashes onto an uncharted desert island

• Good news- everyone survives!

The Twist• Unfortunately, you

were transporting a top secret biochemical weapon that was released into the air upon impact

• Once released, this biochemical weapon turns people into…

Your Odds

• You have a case of antidotes• But it only contains 18 injections

• Children– With 1 injection have a 50% chance of survival– With 2 injections have a 100% chance of survival

• Adults– With 1 injection have a 100% chance of survival

Each group

• Each group gets 3 injections for 6 people

– 2 children– 1 farmer/hunter (adult)– 1 scientist (adult)– 1 builder (adult)– 1 soldier

In your groups…

• In your notebooks, explain the following:– What is the main problem here?– Is there any fair way to fix this problem?– Who gets antidotes and why?

• Then in your groups, decide the fate of each of these 6 people.

ScarcityWhen you can’t have it, you want it

more

Goods

• A good is ANYTHING that an individual wants more of at zero price

Resource• Can be anything that can

be used to produce goods– Land– Labor– capital

How do goods and resources relate to people?

• Humankind has unlimited wants

• Resources are limited

• This causes the problem of scarcity: individually and as a society, we will never have enough resources to produce all the things we want

Scarcity is why we study economics

• Economics is the study of how society manages its scarce resources

Implications of scarcity• Choices- people have to

choose which goods they are willing to acquire

• Costs- There are costs to every choice we make

• Competition- We are in constant competition for scarce resources

I’ll fight you for the last slice of

cake.

Personal Finances

• Yesterday, you were asked to provide your estimate monthly budget and divide your spending into needs and wants

• What is the difference between needs and wants?

Goods and Services• Another way we can look

at your monthly spending is to see how much you’re paying for goods and services

• A good is a tangible item you are willing to pay for

• A service is an intangible item you are willing to pay for

Where Is My Money Going?

• Estimated Monthly Income: $350• Movies / $30 / Service / 8.6% (9%)• DVD / $25 / Good / 7.14% (7%)• And so on and so forth….

My Monthly Spending

Sales

Movies 9%DVD 7%Cell Phone 16%Gas 68%