What Is Economics?

Economia de la empresa

Capitulo 1 What is Economics?


Resume:

Economics studies the choices that can be made when there is scarcity. Scarcity is a situation in which resources the thingswe use to produce goods and services are limited in quantity and can be used in different ways. Because our resources are limited, or finite, we must sacrifice one thing for another. Here are someexamples of scarcity:
- Like everyone else, you have a limited amount of time. If you take a part-time job, each hour on the job means one less hour for study or play.
- A city has a limited amountof land, so if the city uses an acre for a park, it has one less acre for housing, retailers, or industry.
- You have limited income this year, so every dollar you spend on music means one less dollaron other products, or one less dollar saved.

Positive Versus Normative Analysis

It’s important to note that economics doesn’t tell us what to choose, but simply helps us understand the tradeoffs.
Most modern economic analysis is based on positive analysis. Positive economics predicts the consequences of alternative actions, answering the questions “What is?” or “What will be?” Here aresome questions answered by positive economics:
- If the minimum wage increases, how many workers will lose their jobs?
- If two office-supply firms merge, will the price of office supplies increase?- If income taxes are cut, what fraction of the tax cut will be spent on consumer goods?
- If a nation restricts shoe imports, who benefits, and who bears the cost?

A second type of economicreasoning is normative in nature. Normative economics answers the question “What ought to be?” Here are some normative questions:
- Should the government increase the minimum wage?
- Should thegovernment provide $1 billion in foreign aid to an African country?
- Should the government subsidize a college education?
- Should the government cut taxes to stimulate the economy?
- Should a nation...