Problem
The Core Concept of Economics and Opportunity Cost: Making
Alternative Decisions in Allocating Time and Resources
The core concept of economics comes from the answer to the question asked in all economics textbooks: "Why study economics?" Although there is no simple answer to this broad question, economics is a branch of social science that deals with the unlimited desires/wants of human beings and the limited resources to fulfill those desires. Unlimited wants describe the natural behavior of human beings for good reason - it is a thriving force that keeps everyone moving to accomplish their infinite desires. However, the constraints of limited resources make it a challenge to fulfill unlimited desires. The study of economics addresses this challenge by finding ways to allocate limited resources efficiently and thus maximize the unlimited wants and desires. The best practice of economics is to use alternative models to integrate the limited human and material resources to maximize the material well-being of society. More specifically, economics tries to answer three questions (Q1, Q2 and Q3 below) related to the efficient allocation of limited resources to satisfy unlimited wants.
A. What products to produce? (the right selection of products to satisfy the needs and wants of individuals)
B. How to produce? (the technology of production)
C. For whom to produce? (the distributional tasks)