ABSTRACT
Economists have developed a number of basic concepts that are useful when we want to describe how an economy works, and to think about how we might make it work better, as citizens and through government action. This chapter presents some of the most important concepts in economics, including how to approach tradeoffs (when we have to choose among different things that we might want); what markets really are (hint: they aren’t just one thing); and the importance of such abstract things as trust and money. (You didn’t think money was abstract? Wait and see!) Before we get into these concepts, however, we review economists’ basic tools of investigation. The concepts and methods we discuss in this chapter reappear throughout the book and help us better understand modern macroeconomic debates.
