Economics · Ch 1 — Introduction
We Cannot Get Something for Nothing
We Cannot Get Something for Nothing
The central idea here is scarcity — the fact that the things which satisfy our wants are limited in availability, while our wants themselves are not.
A good way to see this is through the story of Aladdin and his magic lamp. Aladdin could summon a genie to grant any wish instantly — a palace, expensive gifts, anything he desired. Real life offers no such lamp. We share Aladdin's unlimited wants, but we have limited means to satisfy them. Think of the pocket money you get to spend: if it were unlimited you could buy almost everything you wanted, but because it is limited you must choose only the things you want most. This need to choose is a basic teaching of Economics.
Activities
- Can you think for yourself of some other examples where a person with a given income has to choose which things and in what quantities he or she can buy at the prices that are being charged (called the current prices)?
- What will happen if the current prices go up?
Scarcity is the root of all economic problems. If nothing were scarce, there would be no economic problem at all — and no reason to study Economics. We meet scarcity constantly in daily life: long queues at railway booking counters, crowded buses and trains, shortages of essential commodities, and the rush for tickets to a new film are all signs of it. …