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Text 6. THE NATURE OF ECONOMICS

Human beings, those unfortunate creatures, are plagued with wants. We want, among other things, love, social recognition, and the material necessities and comforts of life. Our efforts to meet our material wants, that is, to improve our well-being or «make a living», are the concern of economics.

Biologically, we only need air, water, food, clothing, and shelter. But, in contemporary society, we also seek the many goods and services associated with a comfortable or affluent standard of living. Fortunately, society is blessed with productive resources - labour and managerial talent, tools and machinery, land and mineral deposits - which are used to produce goods and services. This production satisfies many of our material wants and occurs through the organizational mechanism called the economic system or, more simply, the economy.

The blunt reality, however, is that the total of all our material wants is many times greater than the productive capacity of our limited resources. Thus, the complete satisfaction of material wants is impossible. This unyielding reality provides our definition of economics: the social science concerned with the efficient use of limited or scarce resources to achieve maximum satisfaction of human material wants.

Although it may not be evident, most of the headline-grabbing issues of our time - inflation, unemployment, health care, social security, budget deficits, discrimination, tax reform, poverty and inequality, pollution, and government regulation and deregulation of business - are rooted in the one challenge of using scarce resources efficiently.

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