Bus PaperPRINCIPLES OF ECONOMICS 2
PRINCIPLES OF ECONOMICS
What is Economics? Economics is the study of the choices we make when there is Scarcity, or a limit in resources. I like to compare the idea of Economics in many ways to being in a family. A family has to make many choices and decisions. A family must decide what each member does to help contribute, such as who cooks and who washes the clothes. In brief, a family should consider the ability, efforts and desire of each member. Just like a family, our society faces many choices. There are alot of jobs that require different people, with the skill set to do those jobs. A society must decide what jobs should be done and who should be chosen to do the jobs. Societies need people to plant or grow food, make clothes and some to design computer software. Once society distribute people and machines to do different kinds of jobs, they should also distribute their products and the time and qualities of their works. Sometimes there is a lack of resourses. Resources in society are very important. If society lacks in resourses, than we would be unable to produce the products. Without products we would not be able to achieve the highest standard of living we look forward to.
In Economics there are four ways of thinking. The first way of thinking is by using assumption. Using this method makes things simpler, by focusing on what really matters. The second economic way of thinking is Isolated Variables-Ceteris Paribus. This way of thinking often involves to or more variables while exploring the relasionship between them. Ceteris Paribus is a latin term meaning that other variables are held fixed.