Welcome to Economics A great economist once said that Economics is “the study of mankind in the ordinary business of life.” E. Napp

Studying Economics will help us in our daily lives. E. Napp

So, what is Economics? The dictionary definition of Economics is that Economics is the study of the production, distribution, and consumption of goods and services. But Economics is much more than that. E. Napp

Here’s a clue: No matter how much money we have, we always want more. Yes, we always want more. E. Napp

Why do we always want more? Economists believe in a concept called scarcity. Scarcity is the idea that our resources are limited but our wants and desires are unlimited. Think about it. Twenty dollars can buy many different goods. Is there only one item you want? Or would you like more? E. Napp

We have so many options but we must choose. We cannot have everything. E. Napp

Scarcity To think like an Economist, you must always remember that scarcity exists. You may only have ten dollars in your pocket but you can certainly think of a hundred different ways to spend it. E. Napp

So, how do we choose? E. Napp

Economics Can Help As we study Economics, we begin to understand that we must make choices. We begin to understand that we cannot have everything we need or want. We begin to understand that with every choice, there is a cost. E. Napp

If we choose to live near the ocean, we are more likely to experience flooding. E. Napp

Every Choice Has Its Cost Economists also teach us that every choice we make has its cost. In other words, every time we get something, we give something else up. There is no such thing as a free lunch. E. Napp

If we surf the waves, we may break our legs. Even fun activities have their costs. E. Napp

It’s all about making choices and knowing the costs of those choices. E. Napp

Questions for Reflection Define Economics. Why must people make choices? Define scarcity. Why do our choices cost us? Define cost. E. Napp