{"id":6280,"date":"2017-04-01T19:25:25","date_gmt":"2017-04-01T19:25:25","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/hccs-macroeconomics\/?post_type=chapter&p=6280"},"modified":"2017-08-17T05:34:18","modified_gmt":"2017-08-17T05:34:18","slug":"scarcity","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/hccs-macroeconomics-3\/chapter\/scarcity\/","title":{"raw":"Introduction and Scarcity","rendered":"Introduction and Scarcity"},"content":{"raw":"

Economics ...<\/h3>\r\n
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John Maynard Keynes<\/div>\r\n\"The<\/span>\r\n\r\n
Fig. 1-One of the most influential economists in modern times was John Maynard Keynes. (Credit: Wikimedia Commons)<\/figcaption><\/figure>\r\n

John Maynard Keynes<\/span> (1883\u20131946), one of the greatest economists of the twentieth century, pointed out that economics is not just a subject area but also a way of thinking<\/strong>. Keynes, shown in Fig. 1, famously wrote in the introduction to a fellow economist\u2019s book: \u201c[Economics] is a method rather than a doctrine, an apparatus of the mind, a technique of thinking, which helps its possessor to draw correct conclusions<\/span>.\u201d In other words, economics teaches you how to think, not what to think.<\/p>\r\nMany students find\u00a0the prospect of taking an economics course\u00a0daunting (or maybe just dull). At the heart of this worry is perhaps just a misperception of what economics is about. It's not rocket science, it's not a\u00a0collection of boring facts, and it's not the study of money or the\u00a0stock market. Economics is really just a set of interesting questions organized around a simple fact: There aren't enough resources (money, land, time, etc.) to go around or satisfy all our needs and desires. Economists call this condition scarcity<\/em>. It affects\u00a0individuals, nations, and the entire human species\u2014no one ever has enough of the things they want. On some level, everyone has to grapple with scarcity, and economists are interested in understanding how people do that.\r\n\r\nIf you understand how people behave in the face of scarcity\u2014and learn to think like an economist\u2014economics can be an amazingly powerful tool. You can predict the behavior of individual economic agents, such as consumers or businesses\u2014what economists call the micro level. You can predict the behavior of an economy (or economies) as a whole\u2014what economists call the macro level. You can have a better understanding\u00a0of the choices\u2014and consequences\u2014in your own life.\r\n

Scarcity<\/h3>\r\nThe resources that we value\u2014time, money, labor, tools, land, and raw materials\u2014exist in limited supply. There are simply never enough resources to meet all our needs and desires. This condition is known as\u00a0scarcity.\r\n\r\nAt any moment\u00a0in time, there is a finite amount of resources available. Even when the number of resources is very large, it's limited. For example, according to the U.S. Bureau of Labor Statistics, in 2016, the labor force in the United States contained more than\u00a0158 million workers\u2014that's a lot, but it's not infinite. Similarly, the total area of the United States is 3,794,101 square miles\u2014an impressive amount\u00a0of acreage, but not endless. Because these resources are limited, so are the numbers of goods and services we can produce with them. Combine this with the fact that human wants seem to be virtually infinite, and you can see why scarcity is a problem.\r\n\r\n \r\n\r\n[caption id=\"attachment_6283\" align=\"aligncenter\" width=\"700\"]\"Mindmap<\/a> Mindmap - Scarcity and its consequences[\/caption]\r\n

\u00a0Resources<\/h3>\r\n
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\r\n\r\nThere are four productive resources<\/strong> (resources\u00a0have to be able to produce something), also called factors of production<\/strong>:\r\n