Economics is a study of mankind in the ordinary business of life. So wrote Alfred Marshall, the great 19th-century British economist, in his textbook, Principles of Economics. Although we have learned much about the economy since Marshalls time, this definition of economics is as true today as it was in 1890, when the first edition of his text was published. Why should you, as a student of the 21st century, embark on the study of economics? Here are three good reasons.
The first reason to study economics is that it will help you understand the world in which you live. There are many questions about the economy that might spark your curiosity. Why do airlines charge less for a return ticket if the traveller stays over a Saturday night? Why is Julia Roberts paid so much to star in films? Why are living standards so meagre in many African countries? Why do some countries have high rates of inflation while others have stable prices? Why have some European countries adopted a common currency? These are just a few of the questions that a course in economics will help you answer.
The second reason to study economics is that it will make you a more astute participant in the economy As you go about your life, you make many economic decisions. While you are a student, you decide how many years to stay in fulltime education. Once you take a job, you decide how much of your income to spend, how much to save and how to invest your savings. One day you may find yourself running a small business or a large firm, and you will decide what prices to charge for your products. The insights developed in the coming chapters will give you a new perspective on how best to make these decisions. Studying economics will not by itself make you rich, but it will give you some tools that may help in that endeavour if that is what you desire. The third reason to study economics is that it will give you a better understanding of the potential and limits of economic policy. As a voter, you help choose the policies that guide the allocation of societys resources. When deciding which policies to support, you may find yourself asking various questions about economics.
What are the burdens associated with alternative forms of taxation? What are the effects of free trade with other countries? What is the best way to protect the environment? How does the government budget deficit affect the economy? These and similar questions are always on the minds of policy makers. Thus the principles of economics can be applied in many of lifes situations. Whether the future finds you reading the newspaper, running a business or running the country, you will be glad that you studied economics.