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Topic Menu | | Unit 1: A Big Problem | | Economics is Scarcity
Wants and Needs
Productive Resources
So What?
Unit 1 Review
| | Unit 2: Resources | | Factors of Production
Four Categories
Labor: The Workers
Capital: The Tools
Land: The Materials
Entrepreneurship: The Organizers
Which Is Which?
Unit 2 Review
| | Unit 3: Opportunity Cost | | Scarcity and Cost
Cost... Plus
Related Cost Terms
Free Or Scarce?
Unit 3 Review
| | Unit 4: College Cost | | Out Of Pocket
Missing Out
What Else?
Unit 4 Review
| | Unit 5: THE Big Problem | | No Free Lunch
A Pervasive Condition
Any Solutions?
Unit 5 Review
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Scarcity
Economists have the well-documented reputation of being a bunch of old grumps. Old economists, young economists, male economists, female economists -- it doesn't matter -- they're all a bunch of old grumps.Being a young, happy-go-lucky sort of guy, this professional reputation has been bothering me since the Roosevelt Administration (Teddy, not Franklin), That's why I was compelled to do a little research into the matter. To no one's surprise, I found out that economists ARE a bunch of old grumps. But I also discovered the reason behind this economic grumpiness, our current lesson -- scarcity. As it turns out, economists are perpetually forced to tell people, especially politicians, that they can't do this and they can't do that. They pass this grumpy information along to others because they realize that scarcity is an unwavering fact of life that means everyone can't have everything.
In this lesson you'll see why scarcity tends to make economists grumpy. You'll see that scarcity is a perpetual condition that exists because people have unlimited wants and needs, but limited resources. You'll also see how this scarcity problem underlies the common notion of cost, which is integral to the study of economics. The five units contained in this lesson provide a tour through the economic problem of scarcity.- The first unit, A Big Problem, examines the fundamental concept of scarcity -- the combination of limited resources and unlimited wants and needs -- that is virtually synonymous with the study of economics.
- The second unit, Resources, discusses the four basic categories of limited resources -- labor, capital, land, and entrepreneurship -- which produce the goods that are used to satisfy unlimited wants and needs.
- In the third unit, Opportunity Cost, we take a look at the notion of opportunity cost and see how it is related to the scarcity problem.
- We then turn out attention in the fourth unit, College Cost, to a simple example of the explicit and implicit costs of attending college.
- The fifth and final unit, THE Big Problem, in this lesson then ponders why scarcity is considered THE economic problem and provides a little insight into why economists are grumpy.
Learning ObjectivesBe on the look out for these ten learning objectives during this lesson: - The scarcity problem and its importance to economics.
- How unlimited wants and needs and limited resources combine to form the scarcity problem.
- The four basic categories of scarce resources -- labor, capital, land, and entrepreneurship.
- Differences between scarce resources and free resources.
- What characterizes the four factors of production and distinguishes one factor from others.
- How the concept of opportunity is related to the scarcity problem.
- The difference between an explicit opportunity cost and an implicit opportunity cost.
- A little insight into the opportunity costs (both explicit and implicit) of attending college.
- Why scarcity is THE ECONOMIC PROBLEM.
- Two somewhat unrealistic (and probably impossible) ways of eliminating the scarcity problem.
    
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