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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%