Bell ringer activity; Scarcity

Key Concepts in Economic Systems

• Economic systems must solve three fundamental economic problems: what goods to produce, how to produce them, and who benefits from them.
• These problems can be solved through custom and instinct, command and centralized control, or a combination of market signals and government directives.
• Mixed economies blend elements of both market economies and planned economies.
• Scarcity is the basic fact of life that there is a finite amount of resources and limited maximum amounts of each economic good that can be produced.
• Without scarcity, there would be no economic goods, as they are relatively scarce compared to unlimited wants.
• Scarcity includes the limited availability of commodities and an individual's lack of resources to buy them.
• The opposite of scarcity is abundance.
• Scarcity is essential for the proper definition of economics itself.
• Walras' definition of social wealth includes all things, material or immaterial, that contribute to economic goods.
• Social wealth is the result of using limited resources to produce goods and services.
• Economic systems play a key role in solving the problem of scarcity and distributing social wealth.
• The different approaches to economic systems have different methods of addressing scarcity and allocating resources and goods.