Economics is fascinating because of its breadth. Like the psychologist, the economist is concerned with individual behavior. Like the sociologist the economist is concerned with the behavior of groups. Like the political scientist, the economist is concerned about how the laws and policies generated by legal and political institutions affect our lives. Like the historian, the economist is concerned about how the past affects and gives context to the present. Like a natural scientist, the economist seeks an understanding of how the resources and processes of the natural world affect humans. Like the mathematician, the economist uses quantitative tools to describe and analyze. There is little entirely outside the scope of economics.
Yet, economics does have a focus. The fundamental economic fact is that resources are scarce. Natural resources, our time, and our money are all scarce relative to their potential uses. Economics is a field of study focusing on the implications of resource scarcity. The fundamental implication of scarcity is that it forces people to make choices about how to “allocate” the scarce resource. Economics is broad in scope because economic concepts apply to any situation where a choice is made. Examples include:
