SCARCITY Write down 5 things you

think are scarce in Louisiana.

Unit 2Economics in Louisiana

SCARCITY AND CHOICES

ResourcesNatural Resources – a gift of nature, part of the natural environment. Examples – Water, Trees or Minerals.

Capital Resources – Money and products used to produce goods and services. Examples: Tools, Factories, and Machines.

Human Resources – People who produce the goods and services.

ScarcityScarcity means that people want or need more than the available resources can supply.

The scarcity of resources means that choices must be made.

ChoicesChoosing how to use

the resources is what an economic system is all about

Every choice is an opportunity

or

Opportunity benefitOpportunity benefit is the item purchased or chosen or the value of the item purchased or chosen when a choice is made

0pportunity costOpportunity cost is the item you did not choose or the value of the next best alternative given up when a choice is made

You go to the mall with $60. Make a choice on the items you will purchase. Now explain which item(s) are opportunity cost or opportunity benefit.

$15

$10

$35

$20

$40

Opportunity Cost or BenefitYour second choice is

your opportunity cost

The choice that you make is your opportunity benefit

SupplySupply is the quantity of goods or services offered for sale.

DemandDemand is the quantity of goods or services people are willing and able to buy.

What would happen if everyone in Lake Charles goes to McDonald’s on

the same day at the same time and orders the exact same thing? What does

this have to do with supply and demand?

Profit

Profit is the amount left after costs are subtracted.

Price Item Sold for – Cost to Make Item = Profit

Building Skills by Making Decisions#1 Identify the problem or choice to be made#2 List the different alternatives#3 Evaluate each alternative#4 Choose one alternative#5 Act on your decision#6 Evaluate your decision

How can we make good ECONOMIC CHOICES?