Economics is complicated and yet simple. It is a study of people (though I suppose it could be applied to any living being that is capable of decision making). It looks at a person, or a group of people’s preferences. This is essentially what a person or group of people want. It could be an individual wanting a car, or a country wanting to increase GDP. Economics then considers what resources an individual or group has access to. A resource could be something tangible like a wrench or intangible like a skill, such as being good at math. At its core economics looks at how people choose to allocate resources in order to achieve different outcomes.
A key problem is that almost all resources are finite. There is almost always a limit on time, money, etc. I say this is a problem, but really economics could not exist if this was not true, otherwise everyone would have everything they wanted. Another ‘problem’ is that people have different preferences. Again, this problem is fundamental to the existence of the field of economics. If I produce cars and another person/company produces food, then I will want some food and they may want some cars. This leads to an exchange of goods. Money makes this simpler by storing value. I may want food today, but a farmer may not want a car for a few years. I can give them money for food today and they can use some of that money to buy a car from me at some point in the future.
These difference of opinions makes politics very complicated. With millions of voters you will get millions of unique sets of preferences (preferences for more than one thing). This is true even for people who vote for the same party, for example the constant political in-party conflict between hardliners, moderates and reformers. Often times when people complain about economic issues, the problem is that their particular preferences are not being acted on in a manner they deem appropriate. Governments not only have to balance different preferences of the citizens, but also have the problem of choosing how to allocate resources. A bridge built in one region may mean a bridge cannot be built in another, or a reduction in taxes may mean lower quality infrastructure.
That is economics in a nutshell. It is how a person or group make decisions on with how to use their limited resources in order to get the best outcome for their selves. Simple and complicated.
Niconomics 