How would we able to define economics? There are many ways of defining economics but the easiest way to put economics is by the way in which money influences, or is organized within an area of business in our society today. With this we ask ourselves can we afford this or not? Everything ultimately ends up to the limitations of our time, the income we earn, and the prices we must pay to enjoy these things. There are many reasons why we have these limitations but to sum up all these in two words are scarcity and incentives.
We can break these two situations in to two, scarcity and incentives. Our ability to not able to truly satisfy our wants are called scarcity. All people face scarcity whether it be the rich or the poor. When we face scarcity or shortages we must choose amongst the choices and options we are given, or in other words alternatives. We must choose whether we want either choice A or choice B. But amongst these alternatives we have an incentive, and this incentive is the choice we make between the two choices we are given. To give you an example of a simple life situation is this: You want both a pen and a pencil but when the price to one of the choices drops, the new price attracts you to the cheaper of the two.
All of our choices in our everyday situations are tradeoffs, and these choices end up deciding what, how, and for whom goods and services get produced for. There are four categories to these tradeoffs; land, labor, capital and entrepreneurship. All of these categories are relied on each other, from quality, machinery, ideas, and natural resources. In economics we call these what, how, and for whom. With this in mind we now get to the question will this be the best choice for my self-interest or for the social interest?
Everyday we face these two types of situations. To the best of our knowledge we make our daily decisions on the foundations of our current resources and time we have, which makes most sense to us at... [continues]
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