Summary
Notes
C1, P2 … Economics is the study of how society manages its scarce resources. In most societ-ies, resources are allocated through the combined choices of millions of households and businesses. Economists examine how people make these choices: how much they work, what they buy, how much they save, how they invest their savings, and so on.
C1, P2 … Scarcity means that society has limited resources and, therefore, cannot produce all the goods and ser-vices people want. Just as members of a household cannot always get their desires satisfied, individuals in a society cannot always attain the standard of living to which they might aspire.
Consider Selena, a student who is deciding how to use her most valuable resource—time. Selena can spend all her time studying economics, all her time studying psychology, or divide her time between the two. For every hour she devotes to one subject, she gives up an hour she could have used studying the other. And for every hour spent studying, she gives up an hour that could have been spent napping, bike riding, playing video games, or working at a job for some extra spending money.