2: Core Economic Concepts
- Page ID
- 71386
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In this chapter, we'll explore the world of making decisions, processing information, and understanding behavior in markets —the world of economics.
- 2.1: The Field of Economics
- We have examined the basic concepts of scarcity, choice, and opportunity cost in economics. In this section, we will look at economics as a field of study. We begin with the characteristics that distinguish economics from other social sciences.
- 2.2: Scarcity and Opportunity Cost
- Economics is a social science that examines how people choose among the alternatives available to them. It is social because it involves people and their behavior. It is a science because it uses, as much as possible, a scientific approach in its investigation of choices.
- 2.3: Specialization and Division of Labor
- Economics is the study of how humans make decisions in the face of scarcity. These can be individual decisions, family decisions, business decisions or societal decisions. If you look around carefully, you will see that scarcity is a fact of life. Scarcity means that human wants for goods, services and resources exceed what is available. Resources, such as labor, tools, land, and raw materials are necessary to produce the goods and services we want but they exist in limited supply.