What is Economics?

Abstract

The subject matter of Chapter 1, and in particular the notion of scarcity, is related to all aspects of economics. Perhaps you are studying economics in order to understand the causes of unemployment, inflation or poverty in the Third World. Perhaps you are interested in understanding the economic issues which sometimes appear to dominate the news. What does it mean when we read that the pound is weak against the dollar, and what are the likely effects of this? Why do governments worry about inflation or the price of oil? We hope that by the end of your course you will have some considerable understanding of these, and of many other, economic issues. We hope you will also understand that all economic issues are related to a single problem: what we call the economic problem.