Economic Behaviour (Routledge Revivals)

Chapter 3The Allocation of Resources

The first two chapters in this book have looked at economic behaviour from the viewpoints of consumer and producer in turn. We have yet to consider the ways in which the decisions of households and businesses affect each other. But before we get to grips with this subject there is one fundamental matter to deal with. Indeed, it is so central to the nature of economics that many introductory textbooks start with it.

Scarcity

So far, we have identified a number of characteristics of goods and services which affect economic decision-taking, but we have not yet dealt with one fundamental property that a good must possess before an economist will pay attention to it. This is the quality of scarcity.

An economist ...