WHY STUDY ECONOMICS? Is it really important … Or is it just another REQUIRED high school credit? Or is there something much more valuable about understanding history?

DID YOU KNOW… Economics is simply a social science that focuses on the choices people make.

Knowing about economics can help us understand WHY people make the choices they do Why do some people choose not to go to college? Why would someone buy a more expensive product when a lesser priced good is available? Why would someone drive to Florida when they could fly? People make choices based on their perceptions of what is best for them.  The tools of economic reasoning help us understand what shapes peoples’ perceptions of the alternatives they face. People’s choices among considered alternatives reflect their perceptions of the costs and benefits – to them – of the alternatives they face.

Economic reasoning is everywhere, appropriate, and always useful It can be used by any age group or culture, in any situation or context.  The insights it provides are powerful and can help you make sense of the confusing world around you. Ironically, although many of the primary issues in young people’s lives link directly to economics and economic reasoning, the economic perspective is often left out of the core K-12 curriculum.

Knowing about economics can help us unlock mysteries of human behavior Many mysteries can be solved by learning how to identify incentives. Incentives are rewards or punishments that influence people’s actions. When incentives change, people’s behavior changes in predictable ways.

We can answer questions like… Why is Disney World cleaner than Yellowstone National Park?  Why is buying “real” Christmas trees (rather than artificial trees) better for the preservation of trees and forests?  Why do so many patriotic Americans not vote in Presidential elections? Why is a legislated increase in minimum wage bad news for poor, low-skilled teenagers? Why did the requirement that young children have their own seat (and seatbelt) rather than sitting on parents’ laps in airplanes cause an increase in childhood deaths? Why does requiring that new cars be manufactured with pollution control technology installed result in increased automobile-generated air pollution?  Why do programs providing government insurance for bank deposits increase the likelihood of bank failure? Why do farmers plant high-water-use crops in areas where water is in short supply – rice in the desert climate of southern California, for example?  Why did the English colonies of North America prosper while the colonies of Spain remained poor despite great discoveries of gold and silver?

By understanding economics, we can dispel common myths and misconceptions. Economics is all about institutions and mathematical models Economics is all about money Bad choices have costs but good choices do not Sometimes people just have no choice It is a good idea to have all the relevant information before deciding Seeking self-satisfaction is selfish Frequently Asked Questions: How can it be that economics is not all about money?  We work for money and without it people cannot participate in the marketplace. A basic principle of economic reasoning is satisfaction maximization.  Isn’t that saying it is O.K. to be greedy?  Isn’t it important to seek all of the information about a possible choice before making it? Isn’t using incentives to influence behavior just a bribe? How can expected cost and expected benefit analysis work when it is impossible to quantify either of these categories in many situations? Why can’t I be sure about the outcome of my choice?

With economic knowledge, we can understand that things are the way they are for a reason. Why is the demand for PS4 so great? What is the price where the supply meets the demand? Why do so many people dislike monopolies, but everyone seems to want to be one? How can businesses stay in business when they don’t earn a profit?

Knowing about economics can help us understand society at many different levels and how it all connects. Households Businesses Country Globe

We can understand government better. Why are taxes necessary? How is the economy affected by the government? How does the government arrive at its economic policies? What types of economies do other countries have?

Why does the government sometimes regulate wages and prices?

Is government involvement a good thing? That’s right, economics can help you understand your own country.

Knowing economics can help us THINK responsibly about economic issues. Are there times when global interests should come before national interests -- and what’s the difference anyway? Do wealthy corporations help the economy or hurt the consumer? What economic sectors are hurting and why? What sectors have great potential for growth?

Knowing economics helps us understand what they talk about on the evening news.

What is a Ponzi scheme?

How does the stock market work?

Knowing about economics helps us appreciate the scarcity of resources.

There is a difference between needs and wants.

We have to make trade-offs.

What is the next-best alternative to what we give up?

Knowing about economic principles teaches us to be smart about our personal finances. It has been said that “An investment in knowledge pays the best interest.” “A penny saved is a penny earned.” “In this world nothing can be said to be certain, except death and taxes.” “Creditors have better memories than debtors.” “If you know how to spend less than you get, you have the philosopher’s stone.” ~ Benjamin Franklin

Ever want to buy a car?

Should you get a job?

How much should you be saving for college?

Where should you invest your money?

It has also been said that “Economy is the method by which we prepare today to afford the improvements of tomorrow” ~ Calvin Coolidge In case the above statements are true, you’d better be on the safe side and …

…Know your ECONOMICS!

Seriously, when you study economics you begin to think differently Seriously, when you study economics you begin to think differently! You begin to see patterns in how economic cycles work…up and down, bull and bear, boom and bust, growth and recession, inflation and deflation, employment and unemployment, expansion and contraction.

Understanding how economics works will help you survive the inevitable times of despair. When you don’t get an expected raise at work. When you have to make a tough decision about your money. When jobs are scarce, inflation happens, or when businesses are failing.

That’s why taking this class is sooooo VERY important.

Like everything in life … YOU will determine your own …

UNDERSTANDING! So buckle down and study! Make a commitment to this class. Keep an open mind. Try your best. Ask questions.

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