The Once-ler had an idea for a new invention, but did not have the materials to make it, so he went on a trip to try and find some. The Once-ler traveled for months before he found it, the Truffula tree. The material was perfect, but Once-ler was having a problem with scarcity when it came to  the Truffula Trees. Scarcity is the concept that there will never be enough resources to meet the unlimited want of society. Because of the limited number of Truffula Trees, he couldn't supply the people with enough Thneeds, leading to him to eventually cut down all of the trees. 

Once-ler asked himself the three most important questions of economics before he started his production of the thneed...

What am I producing?

    I am producing Thneeds. 

Who am I producing them for?

    All of Thneedsville.

How will I produce them?

    I will use the silky tops of Truffula trees. 

Come get your thneeds made out of luscious silk truffela trees. Wear it as a shirt, a scarf, a dress, a hat...

The first factor of production the Once-ler thought of was land. To manufacture the Thneeds the Once-ler needed the land the Truffula trees were on, so he would be able to harvest their Truffula tops.

The second factor of production the Once-ler thought of was labor. To be able to harvest the Truffula tops, the Once-ler needed the labor from the axe cars and his family. They went around the forest and chopped down all the trees to send them to the factory.

The third factor of production that the Once-ler thought of was capital. Once his company started growing bigger he developed machines that would help with the efficiency of harvesting the Truffula tops. These machines were the axe cars that chopped down even more Truffula trees.

The final factor of production that the Once-ler thought of was entrepreneurship. The idea of the Thneed is an example of entrepreneurship because he was the person clever enough to come up with the idea, and took the risk to try and make it a big invention.

The Lorax was awoken from his slumber when he heard a tree fall to the ground, but it was not a storm that took it down, it was the Once-ler The Lorax had a decision to make, wether or not he was going to speak for the trees, and protect them from the Once-ler. He decided to make a PACED chart to decide if he should help.

P- what is the problem:  The Once-ler is chopping down the trees that the animals use to survive.

A- what are the alternatives: One alternative is that the Lorax not come out, and the man continues to chop down the trees.

C- what are the criteria for the option: The environment, pollution, and the animals are all criteria for the decision.

E- Evaluate the alternatives: What will happen to the environment if the Lorax does not help? What will happen to the animals? Who will protect the trees if the Lorax doesnt?

The Lorax made the decision to help the animals, and emerged from his stump, trying to stop the Once-ler from killing any more trees. 

As Once-ler began to produce his Thneeds, he began to think about what else he could have made with the Turffula trees. 

Instead of making Thneeds, Once-ler could have simply not made anything. If he did this he would have still lived with his family and Thneedsville would have always had trees. 

He could have made a different product for example blankets, but it could have taken more trees which would have resulted in a faster destruction of Thneedsville. 

Instead of paying for his machine to be made, he could have put the money into planting more trees and therefore getting a better supply of resources for his business. 

In the end, he decided that the Thneed would be the most successful, and continued to stitch together his first Thneed.

Once-ler is running into a production problem, as he increases his production of Thneeds, the amount of trees in Thneedsville is decreasing. 

A point of maximum efficiency would be the red dot, as it shows that no materials are being wasted, and all of the Truffula material  is either on the trees or made into Thneeds. 

One element that would shift the line to the left would be a loss of the amount of Truffula trees, and an element that would shift the line to the right would be an increase in the amount of Truffula trees. 

The Once-ler, who got into an argument with the Lorax, realized that his actions might not be rational.

The Once-ler, from an economic standpoint, believes that he is rational in his actions, because he is making the choices that provide the greatest satisfaction out of the available options. We can see this when the Once-ler decides to start chopping down the trees instead of just taking the tufts. The Once-ler used marginal benefit as a reason to chop down the trees, as it would provide him with more profit if he produced more Thneeds at a faster rate. If Once-ler however, was looking at the rationality from the animals perspective, then this was not rational because he was taking their homes in exchange for some profit, but economically speaking, he was rational in his actions.

The Once-ler is living in a market economy. You can tell that they are in a market economy because there is limited government involvement, and the company can pretty much do whatever they want without government intervention. Another reason you can tell they are in a market economy is because there is a lot of voluntary exchange ocurrinng between the Once-ler and the customers buying the Thneeds, where the customer gives the Once-ler money in exchange for his product. A final reason you can tell that they are in a market economy is because there is a lot of specialization in what the people are making, such as the Once-ler and the Thneed, in order to make the greatest profit.