1. Explain the fundamental economic problem.2. Examine the three basic economic questions that every society must answer.3. List and use examples of the factors of production.4. Explain the paradox of value.

5. List & use examples for the different types of goods.

Economics: study of how peopletry to satisfy unlimited wants withlimited resources.

**#1 rule of economics: TINSTAAFL

There Is No Such Thing As A Free Lunch

**Major econ. Problem:SCARCITY

--occurs when people do nothave enough resources to produce all of their needs & wants

--does not occur becauseof lack of $

--ie=heart transplant

**4 Factors of Production1. land

Must benatural & is limited

2. capital

Must be usedfor production

3. labor

The work force

4. Entrepreneurs

Risk takers insearch of anew business

Evan Spiegel & Bobby MurphySnapchat

Mark ZuckerburgFacebook

Warren Buffett--Berkshire Hathaway

Phil KnightNike

Mark CubanBroadcast.com

Sean CombsBad Boy Records

Pierre OmidyarEbay

Economic Products: goods & servicesthat 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?

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 “diamond- water” paradox

Economic Products must have:

--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)

Product Partner Project!Improve or come up with a new

product!1. Name it2. Draw the new product3. Answer the three questions

what –be very descriptive and include thetype of good it is

how—how is the product going to bemade (factory, by hand, by you, byhired 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!