Introduction to Economics

Microeconomics/Macroeconomics   Microeconomics: The study of the economy in individual actors Actors: People, Households, Firms, etc. Studies actors making choices/allocation of scarce resources How they decide to deploy them How these choices/allocations affect prices and markets Macroeconomics: The study of the economy in aggregate (The bigger picture) Studies what happens to the economy from the millions of individual actors Focuses on mostly policy-related questions E.g: Raise/lower taxes, what happens if said action is implemented, regulate/deregulate, how said actions affect overall productivity The study of Economics:  Philosophy/Basic ideas on how people make decisions -> Simplified -> Mathematical calculations Though the math can prove results of conclusions/assumption-based, it can be coincidental and should not be treated as definitive proof. Every actor is complicated and having all these people interact with each other results in fundamentally unpredictable interactions, so making assumptions/conclusions of these results. Simplifying the results into mathematical conclusions is valuable and can help predict future actions, but it should be taken with a grain of salt.   "An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today." - Laurence I. Peter