Introduction to Economics
Economics has become quite a popular course at school in recent years. In fact, economics plays an important role in various fields of our life. Most of us may feel that we are familiar with economics, but we seldom think about what economics is and how we can apply it into our future life. These two questions are going to be covered in this essay. 1. What is economics?
The definition of economicsWhy should your students consider studying economics at degree level? The Economics Network's website (whystudyeconomics.ac.uk) attempts to answer this question, guiding A-level students through the difficult decision of choosing a degree course and encouraging students who might otherwise not consider a degree in economics that it is a worthwhile subject. It also provides information to students and parents. This year the website has been relaunched with a brand new look. But why should students consider economics and what can they expect? [PUBLICATION ABSTRACT]
As a new science, economics has been interpreted by professional economists in different ways. However, the definition of economics in Alfred Marshall’s textbook is as widely accepted today as it was in 1890, when the first edition of Principles of Economics was published. As Marshall (1961, p. 1) indicated, ‘Economics is a study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of wellbeing’. Economics is not only the study of business phenomenon or rules, but more important in the human behavior behind business events. What stimulates them to take action? What will they take into consideration before making a decision or taking action? What are the outcomes of human actions? Those are major questions aroused in the economics study.

For the study of human actions, Australian economist Ludwig von Mises proposed his deeper understanding. Reasonable men always doing something for certain purposes and what inspires them is the seeking to change, in another word, they are not satisfied with staying where they are or what they are going to be (Mises 1998). For example, I live 2.5 kilometers away from school. If I walk to school, it will take me around 30 minutes; if I take a bus, it will cost me 7 dollars every day. I am neither willing to get up very early to attend morning classes nor spend too much money on transportation. It is clear that I am unhappy with the transportation means which are walking and/or taking bus. So I plan to replace them with a bicycle. Riding a bicycle to school will save a lot of time on the road. However, it will cost me about 80 dollars on a second-hand bike. Before purchasing a bike, I should analyze whether it is profitable or not. ‘For mortal man, time is the ultimate scarce item’, so time is much more precious than 80 dollars (Gallahan 2004, p. 24). Finally, I choose to buy a bicycle which will bring positive benefits to me. In general, economics is the study of human action, especially paying more attention to the outcomes of choice being made.

The difference between economics and natural sciences
Comparing economics to physics, both scientists try to find rules hidden behind the experimental subject, but physics addresses objects or matter, economics deals with human beings. Because human minds are changeable with little influence of external factors, we cannot get accurate data as do most natural sciences. However, just ‘because the subject matter of economics is human action…, it is the nature of our own human mind that is our chief exploratory tool…to prefer certain outcomes to others, and to act to bring about those preferred outcomes’, providing with economics more advantages than natural sciences (Gallahan 2004, p. 30). We can understand the thoughts or behaviors of the majority of our fellow human beings, while we could hardly explain physical states. Why everything in the world is built up from atoms? Why people choose not to go outside while it is raining? Apparently, the latter is much easier to give an answer which contains the nature of human mind and also includes the essence of economics.

2. How to use economics in our future career and our daily life? * The effects of economics to our life * The ways to apply economics principles to our future life 2. How to apply economics to our future career or our daily life?
Reasons of studying economics
Why we choose to study economics? As we have discussed before, human action is inspired by profits. There must be benefits to us from learning economics. On the one side, it helps us to make a choice in a better way. For example, we have to rent a room before we start university life. Before we make a decision, we need to think about the cost of rental, the position of the house or apartment, and the background of housemate, etc. Once we get a job after graduation, we then decide on how to distribute our earnings. After studying economics, we can see the situation from a new perspective and make wise choices to gain the largest benefits. On the other side, it helps us to understand decisions made by individuals, companies or governments. Why government decides to increase the tax on gasoline? What are the effects? Economics can widen our horizon, bring us deeper understandings on policies, and present a bigger picture on economic phenomena.

Methods of applying economics to our future life
It is not enough to recognize the importance of economics, we should continue to apply our science into daily life. Gans et al. (2012. p. 3) pointed out, ‘four lessons on individual decision making’.
Lesson 1: People face trade-offs
As an old saying goes, ‘You can’t have your cake and eat it too’. Anything we gain requires something we pay. If we spend more time on study, then we will have less time playing with friends, listening to music or sleeping. Of course, we should not study a whole day without sleeping. Economics reminds us of weighing the pros and cons, which can help us making better decisions.
Lesson 2: The cost of something is what you give up to get it
‘…our costs are measured in terms of our foregone alternatives’, which is usually called as ‘opportunity cost’ by economists (Gallahan 2004, p. 27). For instance, we choose to take a job rather than go to university. What is the opportunity cost or what do we give up for a job? We give up knowledge accumulation, a master degree and a better career opportunity for the rest of our life. Economics help us calculate accurately for opportunity cost so we can make a reasonable choice.
Lesson 3: Rational people think at the margin
‘Economists use the term “marginal change” to describe a small incremental adjustment to an existing plan of action’ (Gans et al. 2012. p. 5). For example, you have already spent 500 dollars fixing your car transmission but it is still not working. You can offer 2000 dollars to sell your car now. But you can sell it at 2500 dollars after 300 dollars cost on completely repairing the transmission. Should you continue paying 300 dollars? If you choose to finish repairing car, then there will be a marginal change during the sale of your car. Because rational decisions are made by weighing marginal benefits and marginal costs, you have to count marginal benefits and marginal costs respectively at the beginning. In this case, marginal benefit comes from the difference between sale prices after car being repaired and before it being fixed, which is 500 dollars ($2500-$2000). The marginal cost has nothing to do with previous cost of transmission repairing ($500). It only incurs after making small adjustment to an original action, which is 300 dollars. Obviously, the marginal benefit of the action exceeds the marginal cost. So it is sensible to complete fixing the transmission. Since we often encounter such situations in daily life, we should apply this principle before making similar choices and become familiar with the methods of marginal thinking.
Lesson 4: People respond to incentive
What will happen if Victoria state government provides public transportation concession to international students? Most international students will spend much more time traveling around the city rather than stay at home. Students are more capable of paying transportation fees on train, tram or bus. There will be no loss for the transportation department because public vehicles run regularly any way. Government revenue on public transportation will certainly increase. Furthermore, this policy will also have positive impacts on tourism and the catering industry. We should always take incentives into consideration before making a decision, especially for public policymakers. Conclusion
Economics gives us explanations for human actions, including the reasons, considerations and consequences of making such choices. It focuses on the study of our fellow’s flexible minds, which makes it easier for us to understand human actions and makes it harder to predict their behaviors at the same time. However, it is not enough to be aware of the significance of economics. We should also practice economical principles or lessons when we make a decision. Finally, it is worth pointing out that we should balance benefits and costs, learn to count properly for opportunity costs, get used to the logic of marginal thinking, and take incentives into consideration before making any choices.
References
Marshall, Alfred 1961, Principles of economics, Royal Economic Society, Great Britain.

Mises, Ludwig von. [1949] 1998. Human Action: A Treatise on Economics. Scholar’s Edition, e-book, Ludwig von Mises Institute, Auburn. http://www.mises.org/humanaction.asp Gallahan, Gene 2004, Economics for real people: an introduction to Australian school, 2nd edition, e-book, Ludwig von Mises Institute, Auburn. http://mises.org/books/econforrealpeople.pdf Gans, J, King, S, Stonecash, R & Mankiw, N.Gregory 2012, Principles of economics, Cengage Learning Australia, South Melbourne.