What is Economics?
When you’re five years old, you think there are no constraints and that’s what little kids are not good economists for adults. There are constraints and therefore economics has something to say about it to economics is the study of the allocation of scarce resources and why people make the choices about scarce resources that they make resources broadly put prime land to natural resources to people’s time, to people’s affection, to people’s I mental capacities. I like to think I can I mix is more aware understanding the wild and understanding how you know anyone from I think a person to an entire nation make decisions, that will affect their future, decide whether or not you wanna live on-campus or off-campus terrific costs involved be more or less expensive to do one or the other there are other things which we don’t think others costs.
how much time do you stand on the bus, purse is being able to the jump out that at the last minute and make it to class.
that’s an economics decision, well my favorite example is choosing a life partner you talk from an early age week for mister Right find the dream girl, it’s bad advice because their search costs finding mister right takes effort you after I close the have to waste time if you’re guy you know you have to be presentable you can’t party with your friends at an opportunity cost. So the rational thing to do is not to search for mister Right but to search for mister pretty good not to search for the truth your dream girl, but to search for your day dream girl.
Wanna that areas I find interesting involves behavioral decisions that individuals make that influence their health for instance smoking white individuals decide to start smoking if they do smoke how much do they smoke and if they decide to quit why did they decide to quit a lot of people would say decision about whether or not to smoke and how much to smoke should never involves economics at all and in fact before taxing cigarettes was Ray commonplace a lot of politicians would just conjecture that if we tax cigarettes it’s not an influence behavior because smokers are addicted. So this is
not a rational behavior so why are we even discussing how price might influence but someone is smoking decides to do
and it turns out that economists were able to show that yes smoking does respond to changes in price in particular changes in price the come about through tax increases taxing cigarettes became a much more common policy tool across a lot of states for basically trying to better their health those different communities.
There’s really no stopping what economics can look at if you think about it at the end of the day. knowing something about economics is quite useful because quite frankly going to be confronted with it every day from your individual home life too reading the newspaper to being informed citizen about the a whole range of issues, taking a couple the economic crisis
does influence how you think about the way that you’re making decisions in everyday life and you’ll treasure be changed for the better we have.