Foundations of Economics, 8th Edition

1.2 The Economic Way of Thinking

MyEconLab Concept Video

The definition of economics and the kinds of questions that economists try to answer give you a flavor of the scope of economics. But they don’t tell you how economists think about these questions and how they go about seeking answers to them. You’re now going to see how economists approach their work.

We’ll break this task into two parts. First, we’ll explain the ideas that economists use to frame their view of the world. These ideas will soon have you thinking like an economist. Second, we’ll look at economics both as a social science and as a policy tool that governments, businesses, and you can use.

Six ideas define the economic way of thinking:

• A choice is a tradeoff

• Cost is what ...