What Is Economics?

What is Economics?

Economics is the study of the choices humans make when resources are limited or scarce. The term resources can apply to anything we use to produce goods and services. Resources always are limited whereas the demand by humans for resources is always considered unlimited. The United States has long been looked at as a barometer of economic activity in the world. America has become a prosperous country based on choices we have made in regards to natural resources, the use of labor, entrepreneurship, and what we were going to focus on economically. The United States and the world are currently at a crossroads in which economic decisions made today will either positively or negatively affect current citizens but also future generations.

The United States is currently debating whether or not we should invest heavily in alternative fuels and transportation or if we should continue on the path of oil dependence. The United States spends over 13 million dollars per hour on foreign oil; while the world uses 12 billion more barrels per year then it finds (NRDC , 2011). The ratio of the consumption of oil to the supply of oil causes a classic case of supply and demand and also illustrates the scarcity problem because the amount of oil in the world is finite. The United States has an endless thirst for oil which allows our country to maintain a way of life that we have become accustomed to. Americans continue to consume more and more oil which in turn creates a higher demand for the fossil fuel. The demand for crude oil overwhelms the current supply and drives the price of oil higher. This price increase affects the cost of gasoline which directly affects all transportation including the shipping of products around the world. Retailers are forced to increase the price of goods in an attempt to offset the cost of the delivery of items to their stores. The United States dependence on foreign oil has become