What is Economics? Section 1: Scarcity and the Factors of Production What do the following have in common? Scarcity and Choice Economics is the study of how people seek to satisfy their needs and wants by making choices A need is something like air, food, shelter or water that is necessary for survival A want is an item we desire but is not necessary for survival Economics answers such questions as: What will happen to me if I go to the movies instead of study for this test? How many people should my company employ, and how much should it produce? How much should the national government tax its citizens and on what should it spend the money? Why not both? Why not hire everyone and produce everything? Why not have the government pay for everything? The Answer: Scarcity What is Scarcity? Goods, physical objects like clothes and shoes, and services like haircuts, doctor visits and acting in a movie, are all finite...there isn't an unlimited amount of them Not the same as a ...
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