Introduction

What is the study of economics? Economics isn't about money or the stock market. Economics is about the problem of scarcity. Scarcity, within an economics context, refers to limited resources, not a lack of riches.

If you were to make a list of all of your wants and needs, the list would be very long - possibly endless! Human nature dictates that regardless of how much "stuff" we have, we always want more. It seems humans are never satisfied. Scarcity is a problem that happens because human beings have unlimited wants and needs, but live in a world with limited resources for satisfying those wants and needs.

Because of the problem of scarcity, people - and even entire nations - must make choices about how to allocate limited resources efficiently. Economics is the study of how and why people and nations make those choices.

An important term in the field of economics is marginal. The term marginal is simply another word for additional. For example, when you see the term "marginal benefit" being used, you'll know it really means additional benefit.

 

Lesson Objectives

Following successful completion of this lesson, students will be able to:

  • define wants, needs, scarcity, marginal benefits, marginal costs, and economics.
  • explain the problem of scarcity.
  • evaluate a decision using marginal benefit and marginal cost analysis.

The above objectives correspond with the Alabama Course of Study: Economics objective(s): 1, 1.1, 2.2.

 

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