Supply & Demand - Faculty.utep.edu

Study GuideScarcit and the Science•cono ICSMain IdeaScarcity forces us to make choices. We can't haveeverything we want, so we are forced to choosewhat we want most.Reading StrategyGraphic Organizer As you read the section, completea graphic organizer like the one below by listingand describing the three economic choices everysociety must make.Economic choicesKey Termsscarcity, economics, need, want, factors of production,land, capital, financial capital, labor, entrepreneur,production, Gross Domestic Product (GOP)ObjectivesAfter studying this section, you will be able to:1. Explain the fundamental economic problem.2. Examine the three basic economic questions everysociety must decide.Applying Economic ConceptsScarcity Read to find out why scarcity is the basiceconomic problem that faces everyone.cHarris Poll Shows High Interestin EconomicsThe focus ou economics e~luca-lion is growing.American adultshave an exceptionallykeen in terest. in eco­nomics. More thanseven in ten say theyshare the same highleyel of interest ineconomics as they dopolitics, business a~dHnance. A full 96%believe basic economitsshould be taught inhigh sch001 Yet, half \. h - h 1" h . e ''Ldults and two out of three mg sc 00of t ese sam, . b' wmicstudent.s flunked an elementmy quiz on [ast ~co: eeotClearly the time has come to_ paccon~cPliSte'J'acy hi.,.her on the national education agenda.noml . ) bTl "··'ti·on'll C()lJnci~,127, 1$)99 press reIease. etC "" • '.-Apron EconomiC Educationo you think. the study of economics is worthyour time and effort? According to the Harrispoll in the cover story, a huge percentage ofAmericans think it is. They must know what economistsknow-that a basic understanding of economicscan help make sense of the world around us.e Fundamenta Ec· nami ProblemHave you ever noticed that very few peopleare satisfied with the things they have?Someone without a home may want a small one;someone else with a small home may want a largerone; someone with a large home may want a mansion.Others want things like expensive sports cars,lavish jewelry, and exotic trips. Whether they are richor poor, most people seem to want more than theyalready have. In fact, if each of us were to make a listof all the things we want, it would include morethings than we could ever hope to obtain.The fundamental economic problem facing allsocieties is that of scarcity. Scarcity is the conditionthat results from society not having enough resourcesto produce all the things people would like to have.CHAPTER 1: WHAT IS ECONOMICS? 5