Simplest definition is that economics is the study of how the material needs and wants of a society are satisfied. Any economic system must satisfy 3 basic questions: what is produced, how is it produced, who consumes the goods and services produced. Unlimited needs and wants, limited resources to satisfy those. Scarcity: everyone can"t have everything they need/want. Inevitable: choice of production, choice of means of production. Opportunity cost: next best thing forgone alternative, measure of scarcity. Opportunity cost: most important concept in economics. Decision making at the margin: many, if not most times we make decisions at the margin, deciding whether to purchase one more or one less of a good or service. A student has to go out on friday night. If the student spends all their money then combinations of beer and pizza must satisfy: (4 x b) + (2 x p) = 16.