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THE ECONOMIC PROBLEM: Another term for scarcity, which is the pervasive condition of human existence that exists because society has unlimited wants and needs, but limited resources used for their satisfaction. In other words, while we all want a bunch of stuff, we can't have everything that we want (see free lunch). In slightly different words, this scarcity problem means: (1) that there's never enough resources to produce everything that everyone would like produced; (2) that some people will have to do without some of the stuff that they want or need; (3) that doing one thing, producing one good, performing one activity, forces society to give up something else; and (4) that the same resources can not be used to produce two different goods at the same time. We live in a big, bad world of scarcity. This big, bad world of scarcity is what the study of economics is all about. That's why we usually subtitle scarcity: THE ECONOMIC PROBLEM.
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NORMATIVE ECONOMICS The branch of economics that seeks to recommend the way the economy should operate. It is the policy side of economics that is based on individual preferences and cannot be proven either right or wrong. A normative economic statement cannot be refuted by looking at the real world--that is, by testing hypotheses.
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A communal society, a prime component of Karl Marx's communist philosophy, was advocated by the Greek philosophy Plato.
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"It has been my philosophy of life that difficulties vanish when faced boldly. " -- Isaac Asimov
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PVR
Profit Volume Ratio
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