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What is economics.
One of the things that people discover every day is
that you can’t have everything. You are reminded of it every time you shop.
Although you may see twenty or thirty items that you would really like to buy,
you know that you will have to limit your selection to one or two. Everyone
goes through life having to make choices.
Every business, even sport teams, must choose from
among the things they would like to have because they cannot have everything.
Governments, too, cannot have everything. Every year the most important
political debates concern questions about spending taxpayers’ money.
Neither individuals nor societies can have all the
things they would like to have. There
simply is not enough of everything. Economists note that there is no
limit to the amount or kinds of things that people want. There is, however, a
limit to the resources, things used to produce goods and services, available to
satisfy those wants. Once that limit is reached, nothing else can be produced. In
other words, when nation’s resources (all its workers, factories, farms, etc.)
are fully employed, the only way it will be able to increase the production of
one thing will be by reducing the production of something else.
To summarize: human wants are unlimited, but the
resources necessary to satisfy those wants
are limited. Thus, every society is faced with the
identical problem, the problem of scarcity.