Because productive resources are limited, there will
never be enough goods and services to give everyone what they want. This makes scarcity. Scarcity means that
there are not enough goods and services for everyone to have all that he or she wants.
Trade and Money
Everyone produces the best product they can and then trades (exchanges) with others to get many of the goods and services (economic wants) they consume. Money is anything accepted as final payment for goods and services. Trade without money is called
Because of scarcity, any time a choice is made there
are other choices that are not
chosen. There is always
one best alternative that is not chosen. The value of this best alternative
is the opportunity cost. Both producers and consumers have
opportunity costs when making decisions.