Preston price is low and less goods when

Preston Tyler

Professor Imarhiagbe


24 January 2018

1-2 Summary

Economics is not
all about people making decisions and trading. Economics can help people become
conservative with their money and help them become better at decision making. The
economic way of thinking gives you the power to make judgments about what is
going on in the world. The power of economic analysis can help a business owner
increase their competitive edge. Economics analyzes human behavior and events
just as social sciences do. Peoples wants compared to their needs is economics,
people have unlimited wants but there are limited resources. Money plays a big
role in halting peoples wants, not everyone can buy everything they want
because they can only get what they can afford. Economics explains people’s
choices. The challenge of economics is that peoples wants are unlimited but the
goods to fulfill those wants are limited.  

Economics is
divided into two categories: microeconomics and macroeconomics. Microeconomics
is the smaller prospective of decision making by studying individuals.
Macroeconomics is the larger prospective of decision making by studying the
economy as a whole and aggregates. The aggregates studied in macroeconomics are
made by the decisions of individuals in microeconomics. Economic systems use
these two questions to understand economics, “How will items be produced?” and “For
whom will items be produced?”. Command-and-control has been one type of common
economic system. The most popular to economic analysis is the supply and demand
model. The supply and demand model shows how suppliers try to fulfill the demanders
wants and needs. The demand is the amount of goods and services that the
consumers are willing and able to purchase.

Economists uses
charts and graphs to understand and predict the future. When economist use
charts they use tools like production possibility curves (PPC) and Demand
curves to help understand the future. Charts help show the law of demand which
is where the demanders purchase more goods when the price is low and less goods
when the price is high. The Ability and willingness of the demanders to
purchase goods is known as effective demand.

Chapters one and
two of the Miller text explains the differences between microeconomics and
macroeconomics and the power of economic analysis. The text is trying to teach
us the “economic way of thinking”. Economics is defined as the way people make
choices towards their wants and needs and what supplies are available to
fulfill those wants and needs. There are shortages and scarcities when trying
to fulfill humans wants and needs. Scarcities are when resources are limited compared
to our wants and needs. A shortage is just a temporary lack of supplies.