Some basic simple facts about microeconomics, an extract from a book by Dr Greg Mankiw. the principles of microeconomics second edition isbn: 0-03-027017-0. Economy is a Greek word for "one who manages a household". well my mum is the best economies then. haa. our houses faces many tough decision making. kids want toys, the lady want new shoes, the man want a reliable car etc. how can you manage all this choices effectively. difficult. this is why people take loans, overdrafts and other forms of borrowing, just to get by the daily transactions. from the simple concept of managing a household to the monumental arena of making a whole society or nation works. The decision of job creation, farming, business and all the other professions, this choices make economics very important, in fact so important, nations with bad economics policies suffer all sorts of problems.
the mankiw ten principles of economics
1. "learn that economics is about the allocation of scarce resources." what every body wants will be scarce and thus requires prioritisation. the scarcity is cause by high demands and limitations beyoun human ability to provide everything to the satisfaction of the whole.
this means, there is a need to do preparation in time to avoid missing out on what one needs, since others may require the same product at the same time. For a Gambian, Land is something every Gambian needs. But land is scarce, limited. For one not to be disappointed, he/she must try to acquire it in enough time to avoid paying too much for too little.
2. "examine some of the trade-offs that people face". one most forgo something for another. what is that you want most? At what cost are you willing to sacrifice one thing for the other.
3. "learn the meaning of opportunity cost". now this is a key economic term. i will only write about my own humble understanding. may be you know better than i do. opportunity cost is the cost of the item you forgo for another. this mean, one's wants are listed according to needs. the item that you don't need much or can go without are sacrifice for item you needed most. but going without an item have a cost, this may be adjusting one's routine or lifestyle until you can afford to acquire that item. for instance, i like atayya, but the credit crunch may force me to avoid spending my money on attaya and instead use it to buy bread that i need for breakfast. My stopping drinking attaya which is a traditional Gambian tea in social voius will affect my life style. this has a cost. the cost is adjusting to a life without attaya or waraka.
I will continue next time.