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A core concept we must discuss if we are to understand economics is scarcity. Our wants and needs are endless, but the things we want and need are necessarily finite in nature. Therefore, we can say that these things are scarce. They run out. If they didn't, economics would not exist, because economics is all about making choices based on scarcity. If we spend money on one thing, there is necessarily a trade-off, because we have less money to spend on something else. This is true for both rich and poor, as no one has infinite wealth. When we make choices, there is always an opportunity cost. This is the thing we give up when we make a choice. In analyzing these choices, we can sometimes think at the margin, where we identify marginal costs and marginal benefits for the choices we make, which can be labeled a cost/benefit analysis. This will all make more sense with some simple examples, so let's take a look! Script by Matt Beat: / iammrbeat Animation by Ignacio Triana: / unraveled Watch the whole Economics playlist: http://bit.ly/ProfDaveEcon Mathematics Tutorials: http://bit.ly/ProfDaveMath American History Tutorials: http://bit.ly/ProfDaveAmericanHistory History of Drugs Videos: http://bit.ly/ProfDaveHistoryDrugs General Chemistry Tutorials: http://bit.ly/ProfDaveGenChem Classical Physics Tutorials: http://bit.ly/ProfDavePhysics1 EMAIL► [email protected] PATREON► / professordaveexplains Check out "Is This Wi-Fi Organic?", my book on disarming pseudoscience! Amazon: https://amzn.to/2HtNpVH Bookshop: https://bit.ly/39cKADM Barnes and Noble: https://bit.ly/3pUjmrn Book Depository: http://bit.ly/3aOVDlT