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| | Why should we even spend time on an economics course? Why is it important? How should we define "economics", the term itself? | | Why should we even spend time on an economics course? Why is it important? How should we define "economics", the term itself? |
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| − | It is often helpful to think about and improve the definition of an important word, as a way of increasing your understanding of it. Finding and improving definitions of the words "faith" and "forgiveness" are helpful exercises. Let's work on identifying and improving the definition of the word "economics". | + | It is often helpful to think about and improve the definition of an important word, as a way of increasing your understanding of it. For example, finding '''''and improving''''' definitions of the words "faith" and "forgiveness" can help improve our understanding of them. Let's work on identifying and improving the definition of the word "economics". |
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| | The Merriam Webster's Collegiate Dictionary (1994) defines "economics" (pronunciation is proper with either a long or short opening vowel, as "EE kuh nom iks" or "EH kuh nom iks") to mean: | | The Merriam Webster's Collegiate Dictionary (1994) defines "economics" (pronunciation is proper with either a long or short opening vowel, as "EE kuh nom iks" or "EH kuh nom iks") to mean: |
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| | :"a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services" | | :"a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services" |
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| − | That definition has several terms that cry out definitions of their own, such as "social science" and "goods and services," You might acquire a habit of having a dictionary handy to look up words when you need to, and even when you think you know the meaning in order to see how the dictionary defines it. | + | That definition has several terms that cry out for definitions of their own, such as "social science" and "goods and services," You might acquire a habit of having a dictionary handy to look up words when you need to, and even when you think you know the meaning in order to see how the dictionary defines it. |
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| − | Perhaps we can improve on that definition of economics. But let's first try to define what "goods and services" are, because they are found in the definition of "economics". At first glance, "goods and services" are the things and activities that someone is willing to purchase. Maybe you are not willing to pay for them, but someone is. Essential goods include food, clothes, cars, and books. We all pay in some way for those. The services that we need include help by doctors, dentists, teachers and barbers. A "good" is a tangible "thing", something you can touch; a "service" is an activity, like a taxicab driver transporting someone. | + | Perhaps we can improve on that definition of economics. But let's first try to define what "goods and services" are, because they are found in the definition of "economics". At first glance, "goods and services" are the things and activities that someone is willing to purchase. Maybe you are not willing to pay for them, but someone is. Essential goods include food, clothes, cars, and books. We all pay in some way for those. The services that we need include help by doctors, dentists, teachers and barbers. A "good" is a tangible "thing", something you can touch; a "service" is an activity, like a taxicab driver transporting someone. Candy is a "good"; entertainment is a "service". |
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| − | The meaning of "goods and services" extends beyond our basic needs. We do not '''''need''''' to go to a restaurant or a Yankees baseball game, or see a movie. We do not '''''need''''' to buy ice cream in order to survive. Sometimes people buy things like fancy clothes or cars in order to impress others. Candy is a "good"; entertainment is a "service". | + | The meaning of "goods and services" extends beyond our basic needs. We do not '''''need''''' to go to a restaurant or a Yankees baseball game, or see a movie. We do not '''''need''''' to buy ice cream in order to survive. Sometimes people buy things like fancy clothes or cars in order to impress others. These are things that people '''''want''''' beyond what they '''''need'''''. And people work harder to obtain what they want for themselves, their children, and even to give to charity. |
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| − | So the meaning of "goods and services" goes far beyond what people need, and includes anything they want, and that some people are willing to pay for. Note that not everything people want is something they are willing to pay for. We all want air in order to breathe, but we are not willing to pay for air. "Air" is not a "good or service." We all want friendship too, but that's not something that can be purchased. We all want the Yankees to win the World Series (well, not all of us do!), but we cannot directly buy that either. At most we can buy tickets in exchange for the Yankees' playing a game and ''trying'' to win the World Series. That "service" by the Yankees is a form of entertainment, like a music rock concert or a movie. | + | So the meaning of "goods and services" goes far beyond what people need, and includes anything '''''they want and are willing to pay for'''''. Note that not everything people want or need is something they are willing to pay for. We all want air in order to breathe, but we are not willing to pay for air. "Air" is not a "good or service." We all want friendship too, but that's not something that can be purchased. We all want the Yankees to win the World Series (well, not all of us do!), but we cannot directly buy that either. At most we can buy tickets in exchange for the Yankees' playing a game and ''trying'' to win the World Series. That "service" by the Yankees is a form of entertainment, like a music rock concert or a movie. |
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| | Now we are ready to define economics. We do not have to use the vague term "social science" as Merriam Webster's dictionary did. Our definition can simply be this: | | Now we are ready to define economics. We do not have to use the vague term "social science" as Merriam Webster's dictionary did. Our definition can simply be this: |
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| | Synonyms for "the flow" in this context include "market", "transactions", "making, buying, selling and consuming," and what Merriam Webster's dictionary said above: "production, distribution, and consumption." | | Synonyms for "the flow" in this context include "market", "transactions", "making, buying, selling and consuming," and what Merriam Webster's dictionary said above: "production, distribution, and consumption." |
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| − | But some of the most powerful aspects of our Economics course go beyond goods and services and discuss concepts like the value of time and how we spend our time. The word "economical" means more than goods and services too; it stands for minimizing waste in many different ways, such as wasted words. "Latin describes powerful concepts '''''economically''''' because it uses few words to say a great deal."
| + | Our definition can be improved. It is inadequate because some of the most powerful concepts in our Economics course go beyond "goods and services," and include concepts like the value of time. The word "economical" itself goes beyond "goods and services"; "economical" stands for minimizing waste in many different ways, such as avoiding wasted words. For example, the Latin language is '''''economical''''' because it uses few words to say a great deal. But armed with a working definition, let's begin to learn about economics. |
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| | == The Study of Economics == | | == The Study of Economics == |