topic 1.1 - scarcity & factors of production

need vs. want

human NEEDS require to be fulfilled

• these are basic necessities that people require to live a fulfill life

  • ex;

    • owen NEEDS transportation to get from point a → point b

    • food, housing, healthcare, and transportation

need vs. want

human WANTS are unlimited

• there is always something else that the human individual wants and does not have

  • human wants = unlimited but finite → LIMITED

  • ex;

    • owen WANTS to get a BMW to drive catherine to homeboy

scarcity

• there is only so much of anything —> scarcity (fundamental problem of economics)

• LIMITED quantity while there is an LIMITED want

  • as long as human beings are around, there will be more wants than resources available

  • ex;

    • owen faces a scarcity as gas prices go up because there is only so little oil in the world

shortage

• product/service is unavailable for the time being

  • ex;

    • catherine is devastated because homeboy told her there was a shortage in croffles

factors of production: LAND

• all natural resources used to produce

  • ex;

    • water

factors of production: LABOR

• effort put forth by a person

  • ex:

    • catherine watched owen using his manual labor to make a croffle

factors of production: CAPITAL

• human made resources to produce goods & services

  • ex;

    • catherine tells owen he should start working at homeboy to share his human capital at homeboy

who utilizes the factor of production?

businesses

difference between human capital and physical capital

• knowledge/resources brought by employees to the workplace

difference between human capital and physical capital

• buildings, tools, and equipment