We live in a world of scarcity. There isnt enough of most things to allow people
to have as much as they want. This fact is economic bedrock. From it follows the necessity
of making choices in order to obtain the most satisfaction possible from our limited
resources. Economics is the study of the trade-offs human beings make when they choose
among scarce goods.
An economics textbook should clearly and thoroughly explain that economics is the study
of human action in the face of scarcity, working through the basic concepts of cost
(including opportunity cost), value, prices, incentives, trade-offs and efficiency. The
student needs to understand early on that "the economy" is an interconnected web
of rational decisions, and that the purpose of a course in economics is to explain why and
how people make the decisions they do, and the impact those decisions have on the whole.
For example, it is essential to explain how the price system allocates resources. Even
if the phrase "spontaneous order" is never used, the text must convey the
meaning of this term to the studentthat a free price system serves to direct people
in deciding what to produce and how to produce it so as to make the most efficient use of
scarce resources. The meaning and importance of profits and losses needs to be explained,
as well as the concepts of equilibrium price, shortage, and surplus.