Sinopsis
People’s wants are numerous and varied. Biologically, people need only air,
water, food, clothing, and shelter. But in modern societies people also desire
goods and services that provide a more comfortable or affluent standard of
living. We want bottled water, soft drinks, and fruit juices, not just water
from the creek. We want salads, burgers, and pizzas, not just berries and nuts.
We want jeans, suits, and coats, not just woven reeds. We want apartments,
condominiums, or houses, not just mud huts. And, as the saying goes, “That is
not the half of it.” We also want flat-panel TVs, Internet service, education,
homeland security, cell phones, health care, and much more.
Fortunately, society possesses
productive resources, such as labor and managerial talent, tools and machinery,
and land and mineral deposits. These resources, employed in the economic system
(or simply the economy), help us produce goods and services that satisfy many of
our economic wants. But the blunt reality is that our
economic wants far exceed the productive capacity of our scarce (limited)
resources. We are forced to make choices. This unyielding truth underlies the
definition of economics,
which is the social science concerned with how individuals, institutions, and
society make optimal (best) choices under conditions of scarcity.
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