What is the empty wallet syndrome?Why does scarcity affect us at all times?

What are wants and needs? Needs+= must have to survive items:

Food, clothing shelter, air, water etc.

Wants= things we’d like to have but they are not necessary for survival- unlimited!

How do we satisfy those unlimited wants and needs? We use our very limited resources of

course?

This is called Scarcity!

Because we all have unlimited wants and needs but suffer from limited resources we always face the problem of Scarcity– we must choose wisely.

We can buy Goods & Services to satisfy that utility. But which do I choose?

Sometimes those goods and services are temporarily unavailable.

Economists call that a ShortageSold Out

What are Goods and Services made of? Factors of Production

Land

Labor

Capital

Entrepreneurship

What goes into your empty box? Human Capital

Our knowledge, skills and abilities

How can we maximize our Utility? = Efficiency We weigh our choices and compare

benefits to the costs of each alternative

Economists call this Tradeoffs and Opportunity costs

Tradeoffs= precieved value To Adam Smith and his concept of the

market economy-(laissez faire)

Those values are best determined by the individual

Opportunity Cost= next best alternative to the chosen value

Is there an economic way to evaluate these complex choices?= Graphs Production Possibilities Curves

Resource Schedules