What Is Economics?

Economics is the study of how people manage their limited resources. Here's how it works...

'Scarcity' refers to any situation where people do not have enough resources to produce everything they want. Many resources in this world are scarce: time, land, machinery and equipment, people, raw materials, and natural resources (like coal, oil, gold and lumber). The list goes on.

We use these resources to produce goods and services, but we just don't have enough of them to get everything we might desire. As a result, tough choices need to be made about how our limited resources get used.

These choices always come with sacrifices since using resources for one purpose means they become unavailable for some other purpose. Reflecting on the sacrifice helps us understand the consequences of our choices and what it really costs us to get the things we most want.

...and that's Economics: the study of scarcity, choice and sacrifice. While this sounds pretty straight-forward, there's a bit more to it...

The choices that people make don't happen in a vacuum. Allocating scarce resources is a social activity: people interact with each other, and their decisions affect one another. Economists must study the social, political, cultural and commercial environments where people engage with each other to really understand the decision-making process. This is why Economics is among the 'Social Sciences'.

Education is the best economic policy there is."

Tony Blair (Former British Prime Minister)

To learn more about Economics and why you should study it, check out these videos:

Economics uses a broad set of knowledge, skills and case studies to analyze decision-making. We use pieces of knowledge from Business, History, Political Science, Psychology, Sociology, Philosophy, Environmental Science, Anthropology and Biology. We use skills from Math, Statistics, Computer Science, Communication and English. We look at case studies from Business, Political Science, Social Work, Health Science, Sociology and Criminal Justice. When we mix in knowledge, skills and case studies that are uniquely Economics, we get a very diverse subject that can be applied in many situations. In Economics, there is something for everyone.

The ultimate objective behind Economics is to help people make better decisions. This includes reducing waste, reaching goals faster, getting more and correcting errors. Economists help businesses increase profits. Economists help consumers decide what to buy and how much to work. Economists help governments spend tax dollars on public works in a way that produces the most benefits. Economists help correct situations where markets harm some people (known as 'market failures'). Economists help nations deal with unemployment and inflation. Economists help countries reduce poverty and all the social ills that come with it (like hunger, poor health, and social unrest). Economists help people make decisions which help protect nature, increase safety in our towns and cities, produce better health, reduce violence, secure more freedom and increase prosperity.

As an Economics student at Radford University, you will explore current events, learn how to draw real insights from data, create and evaluate arguments about the way things should be, analyze public policies and identify chains of cause-and-effect. You will learn how scarcity affects decisions made by consumers, businesses, governments, and many other organizations so you can help them make better choices.  You will begin to understand why our economy and society work the way they do. An Economics student is an enlightened citizen.

An Economics student at Radford University:

  • cares about reducing waste and increasing welfare; 
  • strives to be an informed citizen;
  • looks for evidence and proof when people make arguments;
  • uses logic and information to craft their own persuasive arguments;
  • tries to understand other people's perspectives;
  • wants to understand what drives people's choices;
  • is interested in how markets, economies and institutions function;
  • wants to create better strategies to achieve goals;
  • embraces diversity, creativity and innovation as ways to create value;
  • and has habits of the mind which makes them responsiveresilient and real.