0Economics is the study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided.
Probably the most important reason for studying economics is to learn a way of thinking.
Three fundamental concepts:
- Opportunity cost: Opportunity cost is the best alternative that we forgo, or give up, when we make a choice or a decision.Opportunity costs arise because time and resources are scarce. Nearly all decisions involve trade-offs.
- Marginalism: There is no free lunch! Profit opportunities are rare because, at any one time, there are many people searching for them.
- Efficient markets: An efficient market is one in which profit opportunities are eliminated almost instantaneously.
More reasons to study Economics:
- Economics involves the study of societal and global affairs concerning resource allocation.
- Economics helps us understand global affairs
- Economics helps us to be informed voters. Voting decisions require a basic understanding of economics.
- Money and financial systems are an important component of the economic system, but are not the most fundamental issue in economics.
