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After studying the first three sections, Basic Economic Concepts, Supply and Demand,
and Macroeconomic Measurement in the textbook, I learned quite a bit. I signed up for this
class with completely different expectations on what economics is. However, my expectations
were wrong.
I learned that economics is the study of scarcity and choice. The entire economy is a
system for coordinating a society’s productive and consumptive activities, by definition in the
text book. Economists try to regulate the economy, by seeing how efficient it is running by
using opportunity cost and checking for economic growth.
Supply and demand is a good model that economists use to evaluate. It models how a
competitive market works, which is a huge part of the economy. A good balanced economy has
what’s called an equilibrium price. This means that every buyer willing to pay that price finds
a seller willing to sell at that price and vice versa. This is a good thing. This is also how we
measure a surplus and a shortage in product. However, sometimes the economy isn’t running
as well as the government thinks it should, so they step in and will add a price floor or price
ceiling trying to help.
The business cycle is a major part of macroeconomics and such uses formulas to help
calculate the real gross domestic product, which measure’s the economy’s overall output. The
GDO is the total value of all final goods and services produced in an economy during a given
period. This statistic doesn’t fully represent how an economy is effecting its citizens, but it
