This lecture focuses on several basic issues of economics. We will start with a broad overview of what economics is about, then proceed to illustrations of how economics enhances an understanding of how society functions, how people make decisions, and how questions about social issues and policy can be examined. Pertinent reasons for studying economics, and the methods that economists use to examine questions about the workings of economic systems will also be introduced. Upon completion of this lecture, you should understand and be able to answer these key questions:
1. Why study economics?
2. What are opportunity costs and how do they differ from sunk costs?
3. What does it mean to say that there's "no free lunch?"
4. What's the difference between positive and normative questions?
5. What are some logical pitfalls that often get in the way of clear thinking about important questions?