1. Define economics and explain its significance in understanding the disparity between resource-rich and resource-scarce countries.

• Economics is the study of how societies use scarce resources.
• It explains how societies produce valuable goods and services.
• It also explains how these goods and services are distributed among different individuals.
• Resource-rich African countries are poor due to inefficient resource exploitation.
• Resource-scarce Japan has high income due to efficient resource use.
• Efficiently exploiting limited resources leads to betterment and development.