Welcome to Economics Economics is a required course for graduation. A great economist once said that Economics is “the study of mankind in the ordinary business of life.”
Studying Economics will help us in our daily lives.
So, what is Economics? • The dictionary definition of Economics is that Economics is the study of the production, distribution, and consumption of goods and services. • But Economics is much more than that.
Here’s a clue: No matter how much money we have, we always want more. Yes, we always want more.
Why do we always want more? • Economists believe in a concept called scarcity. • Scarcity is the idea that our resources are limited but our wants and desires are unlimited. • Think about it. Twenty dollars can buy many different goods. Is there only one item you want? Or would you like more?
We have so many options but we must choose. We cannot have everything.
Scarcity • To think like an Economist, you must always remember that scarcity exists. • You may only have ten dollars in your pocket but you can certainly think of a hundred different ways to spend it.
Economics Can Help • As we study Economics, we begin to understand that we must make choices. • We begin to understand that we cannot have everything we need or want. • We begin to understand that with every choice, there is a cost.
If we choose to live near the ocean, we are more likely to experience flooding.
Every Choice Has Its Cost • Economists also teach us that every choice we make has its cost. • In other words, every time we get something, we give something else up. • There is no such thing as a free lunch.
If we surf the waves, we may break our legs. Even fun activities have their costs.
It’s all about making choices and knowing the costs of those choices.
Questions for Reflection • Define Economics. • Why must people make choices? • Define scarcity. • Why do our choices cost us? • Define cost. • Why is Economics a required course for graduation?