Introduction to Economics
From Wikiversity
[edit] The Basic Economic Problem
"Economics is the study of the division of scarce resources between unlimited needs and wants"
Let us explain further. You are the head of your household. There are several things which are needed to keep the household running, e.g. food, electricity, gas and so forth. There are also wants, which may not have to be fulfilled per se, but will be acquired somehow.
A store manager has a limited budget to spend on various wants, his resources are scarce. He could spend his money on providing more staff, bringing in more stock from a wholesaler, marketing his product to increase demand through advertising, decorating or improving his store and paying for essential services like water and electricity. Effectively he has unlimited wants but limited means or resources. We say that his resources are scarce. The store manager must economise by choosing to use his resources to satisfy certain wants such as marketing instead of others like stock purchase. As earlier stated, economics is the study of the division of these resources to best satisfy the unlimited wants.
[edit] Another Perspective
Think about why you get up in the morning.
What motivates you to get out of bed? Eat food? Work? Dance? Make friends? Fear of starvation, failure or ridicule?
We are concerned with both the value of doing any given thing as well as the value of not doing any given thing (known hereafter as opportunity cost). Economics comes down to one idea, happiness.
Economics is the quantitive and eventual qualitative description of every human activity in our world. By studying economics you are analysing rational behavior to a higher degree than the level that we live by in our daily lives.
