Standard 1: Scarcity and Economic Reasoning
Objective: Understand why choices need to be
made and things given up
Essential Knowledge: Scarcity, Factors of
Production, Opportunity Cost, Types of
Economies, Production Possibilities Curves (PPC)
Warm-up in Notebook
Question:
 Before a business can start making a
product, they have to answer 3 basic
questions.
 What do you think those 3 questions
are?
Unit 1
Part 2
3 Key Economic Questions,
Factors of Production,
& Group Project
3 Questions every society
or country must answer
 WHAT to produce
 HOW to produce
 FOR WHOM to produce
Difference between
goods and services
 A good is a tangible object. Something
you can see, touch, smell, taste,
consume, or use. An iPad is an example
of a good.
 A service is an intangible object. You
can’t touch, taste, or feel it. Services are
when you hire someone to do something
for you.
Become an inventor
 In your notebook, make a short list (at
least 5) of goods or services you wish
were possible or capable of being
created.
 Examples (don’t use these for your own):
 Clicker Remote that freezes time
 Time machine
 Don’t use money as the product you want to
create (Example: Money Tree)
Group of Inventors
 Create a small group of people in the
class you can work with in and out of
class. You will need at least 3 people in
your group; no more than 5 people
please.
 Project Handout – Will be passed out in
class.
Group Project:
Creating a New Product
 Share the ideas each person in your
group came up with.
 Pick the best idea or combine a few
ideas into a better idea.
Four Factors of Production
 We can’t satisfy all of our wants and needs
BECAUSE what is required to make the goods
and services are SCARCE
THE FOUR FACTORS OF PRODUCTION
(resources)
 Land: Where your product will be made/created
 Labor: The people hired to create your product
 Capital: Physical, Financial, Human (see next
slide)
 Entrepreneurs: The person/people who combine
the other factors of production to create a
business. What is the their main goal?
3 Types of Capital
(All are needed)
 Human Capital: Your skills and abilities
 Physical Capital: All the products used to
create the final product.
 Cheese, sausage, dough, oven, etc. used to
bake a pizza
 Financial Capital: Money needed to
begin a business
Group Project:
Part 1 of 4
 Each group needs one project handout.
Please keep this in the class at all times so
it doesn’t get lost or forgotten.
 Complete the top of the handout:




Entrepreneurs: Names of people in the group
Name of Company: Be create and appropriate
Name of Product: Be create and appropriate
Functions of the Product: What does it do?
What makes it a cool product?
Group Project:
Part 2 of 4
 Answer the 3 Key Economic Questions:
 1. What to produce?
 Using the Function of the Product you just wrote, go
into more detail about the product. What would you
highlight in a commercial?
 2. How to make it?
 Assembly line? One person making an entire
product? Give some details on how you will make
this product.
 3. Who will buy it?
 What specific people would you target in a TV
commercial? Men/Women, Teenagers, Lazy People
Group Project:
Part 3 of 4
 Fill out the information under Factors of
Production:
 Land: Where will you be making this
product?
 Labor: What are the qualifications for
working in your company?
 Capital: What products are used to create
your final product?
Group Project:
Part 4 of 4
 Using the product and information you just
came up with in your group, you will be
creating a video commercial for your new
product.
 The content of the video should include all
of the information on the handout. Also
include the following: Cost of product, how
to purchase product (phone, internet,
specific store, etc).
Continued on next slide ----->
 Videos should be at least 1 minute long
and no longer than 4 minutes.
 You will be responsible for recording and
editing the video. Phones are the most
common devices used to record. I
recommend recording the entire video on
one device only (makes it easier to edit).
 If no one in your group knows how to edit
video, you can download windows movie
maker for free off the internet. It is
extremely easy to use.
 You will be graded on content, time,
originality, and entertainment value.
 You will lose points on this project if there
is inappropriate content, language,
gestures, etc.
 Have fun with this project. It is usually
one of the best projects of the semester,
but it depends on you and your
willingness to create a great video.
 Everyone in your group must be in the
video in some way.
 You will have very little time in class (if
any). You will have to meet with your
group members outside of school to
complete the video.