Scarcity is one of the most important concepts in economics. If resources are not scarce, there is no need to choose among alternatives. In a capitalist economy, when commodities and resources are scarce, the market distributes them in a way that is determined by the price system.
Review scarcity in the market in The Problem of Scarce Resources.
As you review microeconomics, you need to be sure you have mastered some important calculus concepts, such as graphs, variables, and constants. Economists use the scientific method in most economic analysis. Specifically, they examine the marginal benefits and marginal costs of a decision to determine the optimal choice for an individual or company.
Review marginal benefits and marginal costs in:
Review data representation and mathematics for economics in:
Economists have created some basic models to illustrate how people deal with scarcity: specialization, trade, and the circular flow of resources. Individuals and societies specialize in certain products or activities to maximize productivity, to focus on the activities they are most productive in. Trade describes the way individuals and societies exchange goods and services, according to their needs, according to their specialization.
Think about the things or skills you personally specialize in and trade with others. For example, do you work in a certain profession because you have skills or talents your employer needs and is willing to pay you to perform? Do you use the income you earn from this specialization to buy goods and services you need from others?
Review specialization and trade models in What Economics Is and Why It's Important.