Standard 7: Identify the factors of production (i.e. natural/land, labor, capital, and entrepreneurial). Discuss the concept of opportunity cost in the context of business operations, and explain how businesses make decisions based on scarcity of resources.
Opening Assignment
What Would you Do With a Million Dollars?
What if you could earn that much playing a professional sport?
Have you ever heard of Ryan Broyles? Read the following article and answer a few questions on your paper.
Why Would a Millionaire NFL Player Live on Just $60,000?
- According to the article, what's the average number of years that most pro players play for the NFL?
- What pro NFL team did Ryan play for?
- Who did Ryan initially learn about managing personal finances?
- What did Ryan "give up" early in his career to plan for later?
Some players should plan better!
What's an economy?
An economy, or economic system, is the
organized way a nation provides for the needs and wants of its people.
Countries with different economic systems have different approaches when
making choices. From their resources available, they must determine
how to provide for their own population... through manufacturing,
buying, selling, transporting, and investing.
Scarcity
Scarcity
is the difference between wants and needs and the available resources.
Think of something that is very valuable. Take diamonds for example.
Diamonds are very expensive because they are rare. There are not enough
diamonds for everyone to have all they want (or need). They are
scarce.
Now,
think about a source that is seemingly unlimited, like air. Do we have
all the air we need? Air is not as scarce as diamonds are. See the
difference?
Now
use the concept of scarcity to economic resources. Different economies
have different amounts of economic resources. The U.S. has an
abundance of entrepreneurs, and many natural resources, but it still
cannot meet the needs and wants of all its citizens.
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