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Economics is something we all have to face 

everyday in life. Understanding economics 

may be simpler then you think. 

One important part in economics is scarcity. 

Scarcity is when you don't have a lot of 

something. It's like when you have three pieces 

of candy and all your friends want one. There's 

not enough to go around. You have a scarcity of 

candy.

Factors of production are also important in the 

economy. For example if you were to build a 

stuffed animal factory. The land is the land you 

need to build the factory on. Labor would be 

the workers needed to help build the stuffed 

animals, and finally capital would be the money 

needed to buy all the materials to make the 

animals.

Trade- Offs are like if you really want a toy, but 

your mom tells you that you have to clean your 

room to get your allowance. The trade off is 

something you have to give up in order to get 

something else. 

The three economic questions are simple once 

you break them down. Going back to the 

stuffed animal factory the questions you ask to 

make the factory are simple. First how many of 

each stuffed animal need to be made. Second 

how should the animals be made to be the 

most efficient, and lastly who is going to buy 

the stuffed animals. 

There are many goals to a company as well in 

economics. Efficiency, freedom, security and 

predictability, equity, growth and innovation, 

and other goals. These are important to 

different people in different economies. 

With freedom of choice people can chooses 

whether they would buy your toys or toys from 

another company. 

Externality are good and bad things that 

can come from making an economic 

decision. for example expanding a 

cotton farm for more cloth for stuffed 

animals. Good things are more money, 

more types of stuffed animals, and 

cheaper prices for the consumers. Bad 

things would be disrupting animals 

homes and increased noise due to farm 

equipment. 

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