Answer to Question #12248 in Economics of Enterprise for Jasmine

Question

How does the study of economics depend on the phenomenon of scarcity?

Answer 1

Economics explains how people make choices under the conditions of scarcity. Scarcity just
means limited, the easiest way to know if something is scarce is whether or not
is has a price. if it has a price, even if you aren't the one who has to pay it,
then it is scarce. Economics is all about understanding why people would choose
one scarce thing over another scarce thing (why would you pay to have someone
maintain your lawn and change the oil in your car, money is a scarce resource
and you must choose how to spend your money). So economics is the study of how
society manages its scarce resources therefore, the study of economics is only
important because of the scarcity of resources