A Firm Base
Let’s look at a few basic concepts that underlie the discipline of economics.
First, economics assumes that people make rational choices in the face of scarcity. It assumes that people can and will rationally decide what they need and what they can do without. At times, this assumption may seem odd. Are economists saying that people deliberately choose jobs with low pay? Are they saying that people choose poorly made products over high-quality ones?
Well, in a way, yes. Although individuals may have limited choices or make bad choices, they do make choices. Economics aims to explain and predict people’s financial and economic decisions and the ways in which conditions affect their decisions. Almost by necessity, economists generally ...