ABSTRACT
Economists in all sectors are concerned with the allocation of resources between competing demands. Demands are assumed to be innite – there is no end to consumption aspirations. Resources (like labour, raw materials, production equipment and land) in contrast, are always nite. Thus scarcity of resources (not in the sense of ‘rarity’ but in the sense of resource availability relative to demand) becomes the fundamental problem to which economists address themselves. Some readers will have dif culty with this description of the world. It is not necessarily ‘true’ but is, in a broad sense, a model on which economics is based. See Box 1.1 for further discussion of the nature and purpose of models, and of this one in particular.
