Economics
Economics is a social science that examines how we distribute resources when those resources are limited. The economy is a complex system that economists only partially understand, despite the common misconception that economists shape the economy by their actions. Because it deals with the economic choices that impact our daily lives, economics is a discipline that is crucial for thriving communities.
The Greek word oikonomikos, which means "about a house or household," is where the word "economics" originates. This term eventually grew to mean the broad study of topics about one's home or wallet. Thus, the name "economics" came to mean the study of money, trade, the use of resources, and production. Economists have created ideas and practices throughout history to assist in managing economies and generating wealth.
The term "economics" was first used by Adam Smith to refer to macroeconomics, or the study of the entire economy, in 1776. Today's economists do, however, also research microeconomics, which is the study of particular firms and customer behavior. It makes sense that the name "economics" has expanded to embrace other fields of study since it was initially used to refer to the study of money and resources.
Why do we need economics?
This is the question of every academic and non-academic business personality. Let's explore some ideas about it.
We need economics to manage scarce resources. If everything is available in an adequate amount, then there is no need for an economics subject. Economics is essential because it explains how societies distribute finite resources among competing needs. It gives a framework for understanding topics like inflation, unemployment, and economic growth, all of which have a significant impact on our way of living. Furthermore, economics helps us understand how different economic policies and institutions affect the economy, which can help us make informed decisions on economic problems, both individually and collectively. Furthermore, economics is a tool that allows us to weigh the trade-offs and consequences of various policy options, allowing us to make more educated decisions about how to allocate resources and achieve our objectives. For example, if we have an adequate amount of water, then we do not need to take tension between water. In the same way, if there is no demand for that good or service, although that is in less amount, in that situation also we can not say there is a scarcity of resources. For example, if we have some rotten eggs but nobody is willing, then we can not say there is a scarcity of them. So economics is needed to well manage scarce resources. Despite affluence and riches, developed societies face the problem of scarcity. Their wants for goods and services have been multiplying during economic growth, so their present wants for goods and services still remain ahead.
An eminent English economist said the wants of everyone are unlimited but the urgency of wants matters. We have to prioritize our wants and work out to overcome the problem of scarcity.
For solving scarcity, we need efficiency. which means allocating resources in such a way that there is no waste of resources.
Overproduction is possible when there is efficiency. Produced goods or services can be used individually or can be shared with others. For this, we need a market. The market is the place where there is an exchange of goods or services occurs between two economic agents called consumers and producers.The goal of economics is to balance the market in equilibrium. If there is an imbalance between buyers and sellers, the market remains in disequilibrium, i.e. either surplus or shortage. Is economics helpful for household activities?
Economics may help with household duties in a variety of ways. Microeconomic principles such as supply and demand, for example, can assist households in making informed decisions about acquiring goods and services. Understanding the concept of opportunity cost can assist households in deciding whether to spend money on a trip or save it for a down payment on a house. Furthermore, macroeconomic concepts like inflation and unemployment can assist households in understanding the general economic environment in which they make financial decisions.
Conclusion:
Economics is necessary to manage scarce resources because human beings have unlimited wants that cannot be fulfilled at once. Another problem is that scarce resources have alternative uses. It makes sense that the name "economics" has to embrace other fields of study since it was initially used to refer to the study of money and resources. Thus, for the better of producers and consumers, economics always wants to try to balance the market. It avoids market failure.
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