Adapted from Prentice Hall’s Economics: Principles in Action by Arthur O’ Sullivan and Steven Sheffrin
In every society, people have access to resources such as water, soil, and human labor. Yet all resources are limited. Economics is the study of how people choose to use their limited resources to meet their wants and needs. Every society must answer three basic economic questions. How a society answers these questions depends on how much it values different economic goals.
Economic efficiency | Making the most of resources |
Economic freedom | Freedom from government intervention in the production and distribution of goods and services |
Economic security and predictability | Assurance that goods and services will be available, payments will be made on time, and a safety net will protect individuals in times of economic disaster |
Economic equity | Fair distribution of wealth |
Economic growth and innovation | Innovation leads to economic growth, and economic growth leads to a higher standard of living. |
Other goals | Societies pursue additional goals, such as environmental protection. |
Choices About How to Produce Goods
This wind farm illustrates a society’s decision to produce electricity using the power of the wind. What do you think are the benefits and drawbacks of wind power?