Microeconomics Basics - E-book - ePub

To many people, economics is as confusing as physics. Just aswe use physics every day even if we don't know its technicalaspects, we all use economics on a daily basis even if we don'tknow its technical aspects. Yet, unlike physics, introductoryeconomics is not as difficult as it might appear at first. However, it is true that economists speak a different "language"in the sense that we often use terms that are not common ineveryday conversation. For example, economists use terms such as the natural rate ofunemployment, the elasticity of demand, opportunity cost, andcomparative advantage.
These terms are nothing more than ashorthand way of conveying a general concept that alleconomists understand, even if they don't necessarily agree witheach other's conclusions. While specific terms will be introducedthroughout the text, this introductory discussion will focus onsome general terms and concepts. What exactly is economics? You are probably familiar witheconomic terms from watching the nightly news or reading thedaily newspaper.
Economics is often discussed in terms ofunemployment, the stock market, gross national product, thetrade deficit, or consumer confidence. However, none of thesetopics really defines economics. Instead, these are elements ofthe broader set of questions that economics addresses. Economics is often thought of as a boring, dry field populatedwith nerdy professors who have spent too much time indoorslooking at tables of numbers and discussing how things mightwork in the real world while ignoring what actually happens inthe real world.
Such stereotypes are embodied in terms suchas "dismal science" and clichés such as "economists know theprice of everything but the value of nothing." However, theseterms are used by those who do not understand economicsand its connection to everyday life. Believe it or not, the vast majority of economists are notconcerned (in their professional or academic lives) with theintricacies of the unemployment rate.
As in other fields ofinvestigation, such as medicine, engineering, or chemistry, economists often specialize in one or more subfields ofinvestigation. These subfields have many underlying similaritieseven though they demand specific concepts. Economics, broadlydefined, includes the analysis of education, sports, internationaltrade, public policy, strategy, politics, marriage, familydevelopment, transportation networks, military conflict, andpollution, as well as the intricacies of the unemployment rateand trade balances.
However, even listing these subfields fails toconvey what economics is truly about. There are manydefinitions of economics.