Scarce Chairs

Economics: The study of scarce

resources

Potential Solutions

• Most economics would suggest

sealed-bid auction.

So...

• Write down–Name –The maximum price you would be willing and able to pay each class period to have a chair to sit on.

Solution

• Highest bids get seats.

• What did you bid?

• Is that fair?

• That’s economics.

Economics

• Study of scarce resources– What is scarcity?

• What does supply and demand have to do with this?

• Scarcity is a function of both demand and supply. – The greater the demand relative to supply, the

more scarce something is.• What influences our decisions?

Economics

• Because scarcity exists, we must make choices about how to allocate our scarce resources

• The study of the choices people and institutions make because of scarcity is called...

Economics!

Economics

Exit Slip• 1. Economics is the study of _____ and _____.• 2. Because of ______we must make decisions on

how to allocate our ______.• 3. Economists assume that we make _______ based

on our own ________.• 4. _________ are what motivate our decisions.• 5. The greater the _______relative to supply, the

more ____________something is.• What resource was scarce in our activity today? (not

in word bank)