What is Economics?

The typical first-year student walks into his first economics class with very little idea of what economics is. He might have heard something like, "economics is the study of money", or "economics is another word for accounting", or "economics is hard, don't take that class", but none of those are true.

"Economics is the study of the use of scarce resources that have alternative uses." That's the classic definition of economics. Basically, there are people, and people need resources to fulfil their desires. These resources cannot be infinite, but the desires can be, so people need to make choices about how to use their scarce resources. Economists study these choices.

All economic questions fall into one of two categories: positive and normative. Positive economics describes "what is" and normative economics argues for what ought to be, so a question like, "why do people use money?" is a positive question and "should people use money?" is a normative question.

A general rule of thumb is that if your economic model has no value judgements, it's positive economics, and if it does have value judgements it's normative economics, since to tell someone what he ought to do, you first have to judge what is best for him.

Economics is also divided into microeconomics and macroeconomics. Microeconomics studies the behaviour of individual agents and markets, while macroeconomics studies the behaviour of the entire economy.

Economists also have their own branch of statistics called "econometrics" that's specialized to analyzing economic data. Since economic data usually comes from the real world, and not from controlled experiments, econometrics faces mathematical challenges that other fields might not.

The tools economists have developed to study human behaviour have broad uses outside of what we would traditionally consider economics. Economists study not only markets, but things like crime, war, the family, religion, culture, politics, law, and even genetics. That's why it's not unusual to see papers by psychologists, sociologists, criminologists, political scientists, anthropologists, biologists, neuroscientists, or legal scholars being co-authored by economists.

[garimasingh]

Economics is about making choices, that is what we do everyday so i love Economics.

[hadisaif]

I literally just got my Economics degree, idk why I'm watching this lol

[chris_louis]

I am doing Engineering course and taken Economics as an extra subject and my professor gave me this link to watch in my first Eco. class.

[oikonomiageeks]

In the space of scarce resources economics deals with four main problems or questions:

1.Consumption, how and why decide for particular goods?
2.Allocation, or how to decide efficiently?
3.Distribution, or who receives the economic results and why?
4.Order and Institutions, or what is the most convenient framework to act in?

The mentioned subdisciplines consider these problems from different perspectives.

Great video.

[FirstPrinciplesBusiness]

A pretty solid explanation of fundamental economics. Excellent work reducing a complicated subject into a simple and concise description. Your contrast of positive and normative economics was highly clear and simple to comprehend. Overall, I think this is an excellent introduction to economics, and I'd love to hear some of your more in-depth economic studies.

[ryanvalentine]

very good description of basic economics. Great job at condensing a difficult subject into a clear and short definition. I found your comparison between positive and normative economics very insightful and easy to understand. Overall i find this to be a great introduction to economics and i would love to hear some of your more in depth studies of economics.

[studyingfocus]

0:18 - Every time someone tells me whatever I'm talking about is "hard" or "too hard" I think to myself - Maybe is hard for you, or for someone who won't even start it for thinking is "hard", or for a beginner, but everyone starts from a point and if you start thinking it's "hard" you will never even start it, will never stop being a beginner and it will never became "easy" for you.

[cjngaming]

Had to watch this for an assignment in my economics class, very helpful. Thanks!

[bobafitcocomelon]

This is what I've bee researching for: economics is not only money. Great Video! I am super proud of you

[education]

Economics is the study of scarcity resources which means our needs exceed our limited resources available to fulfil this needs, And there is difference between needs and wants, needs is the basic things for survival like water and food but wants are things that complement our life and not necessary for survival like expensive car, apartment .
Economics is classified into two things Micro economics and Macroeconomics .

[francelinomanuel]

"Economics is the study of the use of scarce resources that have alternative uses."

[aleemalla]

You are really a stumblin-block for other youtubers....This video is par excellence and exactly what I was looking for!

[nikite_]

This video is actually great, way better than the one on investopedia.

[richellenel]

Thanks so much for sharing, I was required to listen for my economics course. Was very helpful and simple to understand.

[wpoon]

An excellent introduction about the basics of economics.

[Jessica-ihtp]

I literally just changed my whole alevel course/ subjects from engineering based to economics based now I dunno if I’m gonna regret it

[aegeankosyn]

I didn't actually get anything

[victorsbookshelf]

I have just started reading Basic Economics by Thomas Sowell. It has been a good read so far. You guys might want to check it out. I came across the exact same definition of economics in that book by the way.

Has anyone read it?

[nanikai]

"Multiplicity of wants and scarcity of means are the two foundation stones upon which the structure of Economics rests"..Explains please.

[anyakhalid]

Thank you, I taking Economics now, for next year, you gave me a nice overview.