The Economic Problem 1. Economics is the study of the use of scarce resources to satisfy unlimited human wants. Outputs are the goods and services that people use to satisfy their wants.
Technology refers to the techniques of production.
It is not possible to satisfy all human wants with limited resources. The concept of cost used by economists is called opportunity cost. The Opportunity Cost of going to college. Scarcity is illustrated by the unattainable combinations of the goods. Choice is illustrated by the boundary and the need to choose between alternative combinations of the goods.