Economics Basics: Scarcity, Choice, and Cost

What is the primary test to determine if air is scarce?

What is an example of a free good mentioned in the content?

What happens when we decide we want to breathe cleaner air?

Why does outer space become scarce?

What is the result of one person's use of gravity on another person's use?

What is the scope of economics according to the content?

What is the main reason we have to make choices?

What is the definition of scarcity?

What is an example of a scarce good?

Why can't we say 'yes' to everything we want?

What is an alternative use of a parcel of land?

Why is it necessary for society to make choices concerning the use of land?

What is an implication of scarcity?

Is air an example of a scarce resource?

Scarcity, Choice, and Cost

All choices involve selecting one alternative over another, which is central to economics.
Scarcity is the condition of having to choose among alternatives due to limited resources.
Unlimited wants (desires for goods and services) collide with limited resources, forcing us to make choices.
A scarce good is one for which the choice of one alternative requires giving up another.

Scarce Goods and Alternative Uses

Land is a scarce good with alternative uses (e.g., housing, gas station, park, or leaving it undeveloped).
The choice of one use for land means giving up another use (e.g., if the Lees live in the house, the Nguyens cannot).
Virtually everything is scarce due to alternative uses (e.g., air for breathing and as a garbage dump).

Free Goods and Alternative Uses

A free good is one for which the choice of one use does not require giving up another.
Examples of free goods are rare, but include gravity, where one person's use does not affect another's use.
Outer space was once a free good but is now becoming scarce due to increased use (e.g., allocation of orbital slots for communications satellites).

Implications of Scarcity

Scarcity characterizes virtually everything, making the scope of economics extensive.
Economics is necessary because our unlimited wants collide with limited resources, forcing us to make choices.

Understand the fundamental concepts of economics, including scarcity, choice, and opportunity cost. Learn how limited resources and unlimited wants shape our economic decisions.