Introduction to Economics

What is economics?


Economics is a study. Some might insist it is a science. Others claim it to be an art. Let's compromise and say that economics is a study, an important member of the social sciences. It is a study of how people and society use resources to produce and distribute items for consumption. It deals with the understanding of money and wealth and the use of land, labor, and capital as means of turning resources into useful commodities.
Supply and Demand 1

What is Scarcity?

Scarcity is fewer resources than are needed to fill human wants and needs. These resources can be resources that come from the land, labor resources or capital resources. Scarcity is considered a basic economic problem.

Examples of Scarcity

  • * The gasoline shortage in the 1970's

  • * After poor weather, corn crops did not grow resulting in a scarcity of food for people and animals and ethanol for fuel.

  • * Over-fishing can result in a scarcity of a type of fish.

  • * Fewer farmers raising cattle can result in a scarcity of milk and cheese.

  • * An embargo on imports from a country can result in a scarcity of the resources that country exports.

  • * Due to politics regarding a dam in Gujarat, water has become scarce.

  • * Coal is used to create energy; the limited amount of this resource that can be mined is an example of scarcity.

  • * Those without access to clean water are experiencing a scarcity of water.

  • * In 2012, avian flu wiped out millions of chickens in Mexico creating a scarcity of eggs, a stable of the Mexican diet.