sam44222_ch01_p001-024_1_

sam44222_ch01_p001-024_1_ - PART O NE Basic Concepts...

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PA R T O N E Basic Concepts sam11290_ch01.indd 1 sam11290_ch01.indd 1 2/24/09 1:25:28 PM 2/24/09 1:25:28 PM
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sam11290_ch01.indd 2 sam11290_ch01.indd 2 2/24/09 1:29:47 PM 2/24/09 1:29:47 PM
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3 CHAPTER 1 The Age of Chivalry is gone; that of sophisters, economists, and calculators has succeeded. Edmund Burke The Central Concepts of Economics A. WHY STUDY ECONOMICS? As you open this textbook, you may be wondering, Why should I study economics? Let us count the ways. Many study economics to help them get a good job. Some people feel they should understand more deeply what lies behind reports on inF ation and unemployment. Or people want to understand what kinds of poli- cies might slow global warming or what it means to say an iPod is “made in China.” For Whom the Bell Tolls All these reasons, and many more, make good sense. Still, as we have come to realize, there is one overrid- ing reason to learn the basic lessons of economics: All your life—from cradle to grave and beyond—you will run up against the brutal truths of economics. As a voter, you will make decisions on issues that cannot be understood until you have mastered the rudiments of this subject. Without studying econom- ics, you cannot be fully informed about international trade, tax policy, or the causes of recessions and high unemployment. Choosing your life’s occupation is the most important economic decision you will make. Your future depends not only on your own abilities but also on how national and regional economic forces affect your wages. Also, your knowledge of econom- ics can help you make wise decisions about how to buy a home, pay for your children’s education, and set aside a nest egg for retirement. Of course, studying economics will not make you a genius. But without economics the dice of life are loaded against you. There is no need to belabor the point. We hope you will ± nd that, in addition to being use- ful, economics is even a fascinating ± eld. Gen- erations of students, often to their surprise, have discovered how stimulating it is to look beneath the surface and understand the fundamental laws of economics. SCARCITY AND EFFICIENCY: THE TWIN THEMES OF ECONOMICS Def nitions o± Economics Let us begin with a de± nition of economics. Over the last half-century, the study of economics has expanded to include a vast range of topics. Here are sam11290_ch01.indd 3 sam11290_ch01.indd 3 2/24/09 1:33:31 PM 2/24/09 1:33:31 PM
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4 CHAPTER 1 THE CENTRAL CONCEPTS OF ECONOMICS some of the major subjects that are covered in this book: 1 Economics explores the behavior of the ± nancial markets, including interest rates, exchange rates, and stock prices. The subject examines the reasons why some peo- ple or countries have high incomes while others are poor; it goes on to analyze ways that poverty can be reduced without harming the economy.
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This note was uploaded on 02/17/2010 for the course ECONOMICS 220:103 taught by Professor Sheflin during the Spring '08 term at Rutgers.

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sam44222_ch01_p001-024_1_ - PART O NE Basic Concepts...

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