what is economics? why do we study it?
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Why Study Economics
“Economics deals with society’s fundamental problems; it concerns everyone and belongs to all. It is the main and proper study of every citizen.”… “The common man is the sovereign consumer whose buying or abstention from buying ultimately determines what should be produced and in what quantity and quality.” ~ Ludwig von Mises (1881-1973) What does that all mean? We are the common man! We are the consumer! We are “every citizen!” Economics helps us to understand the use of our resources — natural resources, human resources and capital resources — to help people get the things they need and want. Economics helps us understand how goods and services are provided and obtained (supply and demand). Economics helps us to understand the important concept of scarcity. Scarcity is not having sufficient resources to produce enough to fulfill unlimited things and services that we want. People who study economics are known as economists. Economics Note Set 1 Economics Note Set 2 |
What does economics have to do with me?
EVERYTHING! It deals with time, space, money. It shows us that we have to make choices and that not everything can be obtained at every moment. It shows us that all of our choices have consequences. It also shows us how people respond to incentives.
For Example:
You can either do your language arts homework, practice soccer, or watch Modern Family reruns. If you choose to do your homework, the consequence is that you give up your second choice, or your third. What you do not choose to do is your opportunity cost. It is the next best or second best alternative. Because TIME is limited.
Making more sense?
Plus, you have the incentive to do you homework because that translates into understanding what your teacher wants you to learn, and hopefully helps you earn higher grades in the class! And we all would rather an A over an F, correct?
EVERYTHING! It deals with time, space, money. It shows us that we have to make choices and that not everything can be obtained at every moment. It shows us that all of our choices have consequences. It also shows us how people respond to incentives.
For Example:
You can either do your language arts homework, practice soccer, or watch Modern Family reruns. If you choose to do your homework, the consequence is that you give up your second choice, or your third. What you do not choose to do is your opportunity cost. It is the next best or second best alternative. Because TIME is limited.
Making more sense?
Plus, you have the incentive to do you homework because that translates into understanding what your teacher wants you to learn, and hopefully helps you earn higher grades in the class! And we all would rather an A over an F, correct?