Chapter 1—Answer Key
1. What is the similarity between the Robbins and Friedman definitions of economics??
Robbins: Economics is the science which studies human behavior as a relationship between ends
and means. This relationship naturally leads us to a discussion of scarcity
Friedman: Economics is the science of how a particular society solves its economic problems.
Economic problems exist whenever scarce means are used to satisfy alternative ends.
BOTH TALK ABOUT ENDS AND MEANS NOT MEETING UP  SCARCITY (6 POINTS)
2. The United States is considered a rich country because American can choose from an
abundance of goods and services. How can there be scarcity in a land of abundance?
ABUNDANCE DOES NOT IMPLY UNLIMITED RESOURCES. NO ONE HAS
UNLIMITED MONEY AND TIME, SO EVERYONE MUST CONSTANTLY MAKE
CHOICES. THIS IS THE FUNDAMENTAL BASIS OF SCARCITY. (6 POINTS)