What is economics?
imagine that you lived hundreds of years ago when money did not exist. you traded, or bartered, things that you had for items that you needed. you might barter two goats for a cow or fruits for vegetables. however, bartering had many problems. for example, suppose you were a corn merchant who thought that one ear of corn could be bartered for four tomatoes. but what if the tomato merchant thought that one ear of corn was worth only two tomatoes? how would you decide on a fair price? deciding on fair values for trades was just one problem with bartering. transporting goods (especially long distances) was another problem associated with bartering.

eventually, money came along to make things easier. money was easy to carry (even long distances), had a stated value, and could be traded for goods and services. early forms of money included shells, cocoa beans, dog's teeth, and limestone. over time, various cultures around the world developed coins and paper bills for trading. people took jobs and were compensated for their work with money. they used this money to acquire food, clothing, and other necessities.

in the eighteenth century, adam smith studied how people made decisions about money and work. he published a book called an inquiry into the nature and causes of the wealth of nations. (the wealth of nations, for short.) this book was the beginning of the science called economics. in this lesson, you will learn about economics and its focus on decision making.

Read the passage. excerpt from "why equal pay is worth fighting for" by senator elizabeth warren, april 17, 2014 i honestly can't believe that we're still arguing over equal pay in 2014. when i started teaching elementary school after college, the public school district didn't hide the fact that it had two pay scales: one for men and one for women. women have made incredible strides since then. but 40 years later, we're still debating equal pay for equal work. women today still earn only 77 cents for every dollar a man earns, and they're taking a hit in nearly every occupation. bloomberg analyzed census data and found that median earnings for women were lower than those for men in 264 of 265 major occupation categories. in 99.6 percent of occupations, men get paid more than women. that's not an accident; that's discrimination. the effects of this discrimination are real, and they are long lasting. today, more young women go to college than men, but unequal pay makes it harder for them to pay back student loans. pay inequality also means a tougher retirement for women. . for middle-class families today, it usually takes two incomes to get by, and many families depend as much on mom's salary as they do on dad's, if not more. women are the main breadwinners, or joint breadwinners, in two-thirds of the families across the country, and pay discrimination makes it that much harder for these families to stay afloat. women are ready to fight back against pay discrimination, but it's not easy. today, a woman can get fired for asking the guy across the hall how much money he makes. here in the senate, sen. barbara mikulski (d-md.) introduced the paycheck fairness act to give women the tools to combat wage discrimination. it would ensure that salary differences have something to do with the actual job that they are doing, and not just because they are women. senator warren states that the effects of pay discrimination are long-lasting. is this a valid argument supported by accurate evidence? no; warren weakens her point by claiming that the paycheck fairness act would "give women the tools to combat wage discrimination." yes; warren supports her point by noting, "for middle-class families today, it usually takes two incomes to get by." yes; warren supports her point by noting, "pay inequality also means a tougher retirement for women." no; warren weakens her point by noting, "today, a woman can get fired for asking the guy across the hall how much money he makes."