specialization when workers or firms focus on particular tasks for which they are well-suited within the

overall production process

theory a representation of an object or situation that is simplified while including enough of the key features

to help us understand the object or situation

traditional economy typically an agricultural economy where things are done the same as they have always

been done

underground economy a market where the buyers and sellers make transactions in violation of one or more

government regulations

Key Concepts and Summary

1.1 What Is Economics, and Why Is It Important?

Economics seeks to solve the problem of scarcity, which is when human wants for goods and services exceed

the available supply. A modern economy displays a division of labor, in which people earn income by

specializing in what they produce and then use that income to purchase the products they need or want. The
{"batch_upload": true, "uploaded_via": "batch_uploader", "upload_timestamp": "2026-02-07T15:24:38.309401", "moddate": "2022-12-07T14:23:05-06:00", "producer": "Prince 14.2 (www.princexml.com)", "total_pages": 597, "file_name": "Microeconomics3e.pdf", "file_hash": "830b81f41611ac67a490444dbb5d6aed292224606965b06965b914443c93331a", "creationdate": "2022-12-07T14:15:44-06:00", "file_type": ".pdf", "source_file": "downloads\\business\\economics\\Microeconomics3e.pdf", "creator": "PDFMiner", "source": "downloads\\business\\economics\\Microeconomics3e.pdf", "file_size_mb": 26.99, "title": "Principles of Microeconomics 3e"}