Microeconomics Basics (ePub)

To many people, economics is as confusing as physics. Just as
we use physics every day even if we don't know its technical
aspects, we all use economics on a daily basis even if we don't
know its technical aspects. Yet, unlike physics, introductory
economics 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 in
everyday conversation.

For example, economists use terms such as the natural rate of
unemployment, the elasticity of demand, opportunity cost, and
comparative advantage. These terms are nothing more than a
shorthand way of conveying a general concept that all
economists understand, even if they don't necessarily agree with
each other's conclusions. While specific terms will be introduced
throughout the text, this introductory discussion will focus on
some general terms and concepts.

What exactly is economics? You are probably familiar with
economic terms from watching the nightly news or reading the
daily newspaper. Economics is often discussed in terms of
unemployment, the stock market, gross national product, the
trade deficit, or consumer confidence. However, none of these
topics really defines economics. Instead, these are elements of
the broader set of questions that economics addresses.

Economics is often thought of as a boring, dry field populated
with nerdy professors who have spent too much time indoors
looking at tables of numbers and discussing how things might
work in the real world while ignoring what actually happens in
the real world. Such stereotypes are embodied in terms such
as "dismal science" and clichés such as "economists know the
price of everything but the value of nothing." However, these
terms are used by those who do not understand economics
and its connection to everyday life.

Believe it or not, the vast majority of economists are not
concerned (in their professional or academic lives) with the
intricacies of the unemployment rate. As in other fields of
investigation, such as medicine, engineering, or chemistry,
economists often specialize in one or more subfields of
investigation. These subfields have many underlying similarities
even though they demand specific concepts. Economics, broadly
defined, includes the analysis of education, sports, international
trade, public policy, strategy, politics, marriage, family
development, transportation networks, military conflict, and
pollution, as well as the intricacies of the unemployment rate
and trade balances. However, even listing these subfields fails to
convey what economics is truly about. There are many
definitions of economics.