Basic principles of Economics

Text Sample:
Chapter one, Introduction:
Economics can be defined as the study how scarce resources can be used to satisfy human wants or needs. Economics is a discipline which studies man s endeavor to satisfy his unlimited wants out of the given scarce resources. Economics deals with how people allocate finite resources. There is a tendency to act by fulfilling their own interests that result into selfishness, greed among other undesirable traits. In a bid to satisfy his needs, man tries to allocate resources in an efficient manner.
Scarce resources are such things like raw materials, labor and energy used to produce goods and services to satisfy human wants human wants and needs. Economics attempts to answer the questions of what to produce, how to produce, for whom to produce, when to produce, and where to produce. In society, human wants have a bearing on human effort and activities. Man seeks to be progressive so as to have a better life.
In his endeavors to satisfy these wants, interdependence is vital so that he produces what is in his means so that through exchange he is able to get what he cannot produce. Out of this three fundamental problems in economics arise. And these are;
1) Scarcity. This simply means the universe contains resource endowments but limited in supply and therefore unable to satisfy all man s wants. There is a fundamental economic problem of relative scarcity of resources (production factors) of labor, capital, entrepreneurship and capital that is needed to produce goods and services required to satisfy man s unlimited and insatiable wants or bars the supply of the commodities needed relative to the people s desire for them.
2) Choice. This also arises out of relative scarcity of factors since all human wants can t be satisfied at once due to scarcity of resources to produce all goods and services man desires. Therefore a decision has to be made so as to determine which wants should be satisfied first and which ones later. These