What is Economics
Economics is the study of how people, firms, and governments make choices when resources are scarce — and how those choices add up across an entire society. Because you can never have everything, every decision means giving something else up.
Key ideas
- Scarcity forces trade-offs: every choice carries an opportunity cost — the value of the next best thing you gave up.
- Microeconomics zooms in on single markets, firms, and households; macroeconomics zooms out to the whole economy.
- Incentives drive behaviour — change the costs and benefits, and you change what people do.
- Models are deliberate simplifications: they trade some realism for the clarity to reason about cause and effect.
In practice
Imagine you have a free Saturday. You could work a shift for $80, study for an exam, or relax. Economics doesn't tell you which is “right” — it tells you to weigh each option against what you give up. If you choose to relax, the opportunity cost is the $80 you didn't earn plus the exam marks you didn't gain. Naming that cost is what turns a vague feeling into a clear decision.
Summary
Economics is a way of thinking, not a pile of facts. Once you start spotting scarcity, trade-offs, and incentives in everyday life, the rest of the course is just adding precision to instincts you already have.
Try it yourself
Economics is about making choices precise — and so is code. Edit the snippet below and press Run to see the output. Try changing the numbers.
Keep going
0 of 5 sections answered.