Chapter 1 What is economics

In this chapter, the author mainly gives a brief description of the definition of economics. It is mainly explained from three aspects.

1. Scarcity

Most people may regard economy as a system for producing and distributing products and services necessary for daily life, but the author points out that this view is not accurate. Because all things and resources are limited, there is so-called scarcity of resources. It is one of the topics to be studied in economics to find out the scarcity degree of these resources, because knowing the scarcity degree of some resources can make corresponding decisions and allocate them reasonably. Scarcity is not only related to the resources themselves, but also to people's needs. If people's needs are great, the scarcity of resources may be higher. At the same time, it is also a knowledge to find out whether people's needs are necessary, whether they are living or desire, which is very important for the impact of scarcity.

2. Production efficiency

Production means taking one resource to produce other resources and services. Resources used as raw materials may have many uses, such as water resources, which can be used for reference or mixed with something. Reasonable allocation of resources with multiple uses for each purpose is also a research topic in economics, because each country has different production efficiency, such as Japan and Switzerland, which have few national resources but high production efficiency, while the Soviet Union or Russia, although rich in national resources, have very low utilization efficiency and productivity.

as for money, it's just a measure to represent these resources.

3. The role of economics

First of all, economics is not exactly what people think. It is a discipline that teaches people how to make money, how to run a business or how to predict the fluctuation of the stock market. In fact, it is a systematic study of causality and reveals what results will be caused when doing certain things in a specific way. It is not only a causal analysis tool, but also a tested knowledge system and the principles derived from this knowledge system.

after reading this chapter, my understanding is that economics is a discipline that teaches people how to allocate scarce resources with multiple uses effectively. Because in the process of distribution, people will face trade-offs, and how to make the best choice is the main idea to be taught in this subject.

What attracts me about this book is that he introduced in the preface that economics is not as profound and complicated as you think. On the contrary, some of the most important ideas should be easy to understand, and I want to understand the so-called basic principles of economics through this book.