Why Study Economics?

What makes the price of oil go up?   Why is there unemployment?  What is inflation and why would anyone care?  All of these are questions where economics plays an important role.  In short, economics plays a central role in your life.  Wondering how companies will ever be able to continue producing CD's?  Will itunes put them out of business?  Worried about what job to pursue?  Wondering about why some fields get paid more than others?   Economics!  Thinking about the cost of gasoline and what makes it so high?  Economics!  Worried about rent and trying to figure out where to live?  Economics again!  The tuition keeps rising.  Why?  All of these questions revolve around economics and economics plays a key role in these and many other questions.  In short, economics is all around you. 

So for the person who is curious about how the world works, knowing something about economics is a pretty important thing, and the view point of economists is a powerful way to examine how a part of the world works.  Economists see that scarcity is a fundamental fact in our life.   In short, there is simply not enough goods and services to provide for the needs and wants of the population.  If we try to increase the amount of support for preschool programs, we are likely to have to cut programs for the aged.  If we want more resources to flow to the production of tanks, we will likely have to reduce the number of pianos we would produce.  In short, as individuals and as a society, we face scarcity.  As a result, choices must be made.  It is the process of how these choices are made that is of fascination to the economist.  We like thinking about different mechanisms that could be used to make these decisions.  And at the end, our understanding of economics is important - especially when candidates for public office claim they have the answer to inflation or unemployment or any other evil you can imagine.   A good dose of economics will often make the unworkability of the proposal evident.   A bit of economics can be a really powerful thing.