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Scarcity and Wants/Needs. Jack Wheatley. Scarcity. The fundamental problem of having seemingly unlimited human wants and needs in a world of limited resources Society does not have enough resources to fulfill all human wants and needs E.g. Helium - PowerPoint PPT Presentation
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Jack Wheatley
Scarcity and Wants/Needs
The fundamental problem of having seemingly unlimited human wants and needs in a world of limited resourcesSociety does not have enough resources to fulfill all human wants and needsE.g. Helium• Often used as cooling agent for nuclear reactors• Only about 30 years of Helium left for use on Earth• Finite element; we will eventually run outNeed to find alternate resources for common wants and needsMost things are finite; we need alternate resources for every time resources come to and end, or an unlimited resource
Scarcity
Something that is necessary for survivalFood, shelter, waterLimited resources (needs)
Something that is desirediPhone, XBOX, Garrett’s cow costumeUnlimited wants
Wants vs. Needs
• Must distinguish wants from needs• What is necessary in today’s society?• Represent overall concept of demand
Earlier this month, Obamacare website crashedThough the reason was proved not to be by traffic on the website, this is a vague example of scarcity – when a website crashesSo many people want to use a product (website), but there are limited resources (workers keeping it updated), so it crashes.Another example: Everyone wants a new pair of shoes, but there are only limited resources to make the shoes. When they run out of these resources, they can’t make the shoes, and not everyone can have them
Connection – Scarcity
Your annoying group of friends is complaining at a party that the pizza is from Domino’s and not from Pizza HutPizza Hut pizza: WANTPizza (food): NEEDYou need the food in order to live/survive. Pizza from Pizza Hut is just a privilege.Conclusion: Tell your friends to stop complaining about the origin of the pizza, and just be grateful to have the pizza.
Connection – Wants vs. Needs
GDPBy: Samson Tessema
DefinitionGDP(Gross Domestic Product) – the market value of all officially recognized final goods and services produced within a country in a given period of time
Explain Term/ConceptIt is used to show how well a country’s economy is doing
The total number of goods and services produced over a specific period of time
Visual‘Murica
Connection
GDP=AEWAEW=Average Economic Wealth
Stock Market/Dow Jones industrial average
Kj McBride
Definitions
Stock market – a stock exchange
Dow Jones Industrial average – an indicator of stock market prices; based on the share values of 30 blue-chip stocks listed on the New York Stock Exchange
Stock market
• When a company is in need of money they can sell part ownership in the company with a claim
• As the company’s funds increase the claim you have with the company increases too
• If the company’s funds decrease so does the claim
Dow Jones Industrial Average
• The overall indicator of the condition of the stock market
• It is based on 30 stocks selected by editors of the wall street journal
• They are the 30 most actively traded stocks on the market
Visual
connection
We are using the stock market in classItIs
Fun
Microeconomics• the branch of economics
dealing with particular aspects of an economy, as the price-cost relationship of a firm
Macroeconomics• the branch of economics
dealing with the broad and general aspects of an economy, as the relationship between the income and investments of a country as a whole
Microeconomics
• analysis of the decisions made by individuals and groups, the factors that affect those decisions, and how those decisions effect others
Macroeconomics
• examines the economy as a whole and answers questions such as 'What causes the economy to grow over time?
How can you remember?
• Micro means small and it is the analysis of individuals and small groups
• Macro means large and it examines the whole economy
Corporation
Company or group of people authorized to act as a single entity (legally a person) and
recognized as such by law
What is a Corporation?• Created by a group of shareholders who own corporation
– Shareholders represented by holding of common stock.• Shareholders elect a board of directors (one vote per
share) who appoint and oversee management of the corporation.
• Majority of corporations are setup with the goal of providing a return for its shareholders– Some are nonprofit
• When you purchase stock you are becoming part owner in a corporation.
Connection
Common Stock
Shares entitling their holder to dividends that vary in amount and may even be missed
depending on the company’s future
What is Common Stock?
Connection
Preferred Stock
Stock that entitles the holder to a fixed dividend, whose payment takes priority over that of
common stock dividends
What is Preferred Stock?
• Class of ownership with higher claim on earnings than common stock. Preferred stock generally has a dividend that must be paid out before dividends to common
• Shares usually do not have voting rights.• Details of structure specific to individual
corporations • Also known as "preferred shares".• Negatives: no voting, less appreciation
Connection
Wouldn’t you much rather prefer having money first rather than later?
Free Market EconomyJOSH SHIKOFF
Definition
A free market economy is an economy in which decisions regarding investment, production and distribution are based on supply and demand, and prices of goods and services are determined in a free price system (economic system where prices are set by the interchange of supply and demand)
Simply…
That means people can freely buy and trade goods and services. The price of each good or service is determined not by the government but by demand. Demand is a measure of how many people want to buy a particular good or service.
Visual
Real Life Example Ebay is an example of a Free Market Economy because the
people control the market by making their own prices. The price posted is dependent on the supply and demand of the product. For example, if someone posts a Honus Wagner card it will sell for more since not many people are selling them and there is a high demand. One the other hand, a normal Ryan Howard card will have less demand therefore it will have a greater supply that sells for cheaper.
FACTORS OF PRODUCTION
By: Garrett Cantor
Definition The inputs that are used in production of
goods or services in the attempt to make a profit – Investopedia
Inputs are everything used from beginning of production to end
Examples Land – Naturally occurring goods Labor – Effort put into production (mostly
human) (Intellectual, social) Capital – Human made goods used in
production Subject of Labor – objects transformed by
labor
Visual
Connection
Factor x Factor = Product
Capitalism Capitalism is an economic and political system in which a country’s trade and
industry are controlled by private owners for profit, rather than by the state.
By: A.J. Drobot
Explaining Capitalism in Understandable Terms
• Economic system based on private ownership on the means of production and capital goods. (Durable good used in production)
• The parties usually determine the prices at which assets, goods, and services are exchanged.
• There are three types of capitalism; Laissez-faire Capitalism, Welfare Capitalism, and State Capitalism.
• Capitalism is defined as a social and economic system in which capital assets are mainly owned and controlled by private persons.
• Labor is purchased for money wages, and the capital gains accrue to private owners, and the price mechanism is utilized to allocate capital goods between uses.
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Supply and Demand
By: Jack Brown
Definition
In microeconomics, supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers (at current price) will equal the quantity supplied by producers (at current price), resulting in an economic equilibrium for price and quantity.
Definition Simplified
The higher the quantity of a certain good is, the lower the cost. The lower the quantity of a certain good is, the higher the cost.
Concept
If Juanita has 1 apple, she might sell it for 5$ because she only has one.
If Jibbly has 5 apples, he might sell them for 3$ each because he has more of them
Connection
/l\ l/ l \ l l Quantity $$$ l l \ l / l \l/
Jack Wheatley
Scarcity and Wants/Needs
The fundamental problem of having seemingly unlimited human wants and needs in a world of limited resourcesSociety does not have enough resources to fulfill all human wants and needsE.g. Helium• Often used as cooling agent for nuclear reactors• Only about 30 years of Helium left for use on Earth• Finite element; we will eventually run outNeed to find alternate resources for common wants and needsMost things are finite; we need alternate resources for every time resources come to an end, or an unlimited resource
Scarcity
NEED:Something that is necessary for survivalFood, shelter, waterLimited resources (needs)
WANT:Something that is desirediPhone, XBOX, Garrett’s cow costumeUnlimited wants
Wants vs. Needs
• Must distinguish wants from needs• What is necessary in today’s society?• Represent overall concept of demand
Earlier this month, Obamacare website crashedThough the reason was proved not to be by traffic on the website, this is a vague example of scarcity – when a website crashesSo many people want to use a product (website), but there are limited resources (workers keeping it updated), so it crashes.Another example: Everyone wants a new pair of shoes, but there are only limited resources to make the shoes. When they run out of these resources, they can’t make the shoes, and not everyone can have them
Connection – Scarcity
Your annoying group of friends is complaining at a party that the pizza is from Domino’s and not from Pizza HutPizza Hut pizza: WANTPizza (food): NEEDYou need the food in order to live/survive. Pizza from Pizza Hut is just a privilege.Conclusion: Tell your friends to stop complaining about the origin of the pizza, and just be grateful to have the pizza.
Connection – Wants vs. Needs
DI$POSABLE INCOME
Miriam van der Spek
DEFINITION• The part of a persons income remaining after
deducting personal income taxes.Or• The portion of an individual’s income over
which the recipient has complete discretion.
Explanation:• Disposable income is the money that a person has
from their paycheck (after indirect taxes), investments, etc.
• Unfortunately, there are required payments to be paid, as well as those which we choose to pay for.
• Required payments are things like taxes.• “Other” payments are things like Netflix.• Sometimes disposable income goes to those payments
that seem to fit in both categories, such as electric or heating bills.
Visual
YOU
paycheck
Before indirect taxes After indirect taxes
Obligatory payments
Voluntary payments
YOU
Connection
• Disposable Income: The income you can throw away to where you want
YOU
BILLS
