``ECONOMICS``
Economics may appear to be the study of complicated tables and charts, statistics and numbers, but, more specifically, it is
the study of what constitutes rational human behavior in the endeavor to fulfill needs and wants.
As an individual, for example, you face the problem of having only limited resources with which to fulfill your wants and
needs, as a result, you must make certain choices with your money. You'll probably spend part of your money on rent,
clothing and food. Then you might use the rest to go to the movies and will spend money on other less important needs. Economists are
interested in the choices you make, and inquire into why, for instance, you might choose to spend your money on a new DVD
player instead of replacing your old TV. They would want to know whether you would still buy a carton of cigarettes if prices
increased by $1 per pack. The underlying essence of economics is trying to understand how both individuals and nations behave
in response to certain material constraints.
We can say, therefore, that economics, often referred to as the "dismal science", is a study of certain aspects of society.
Adam Smith, the "father of modern economics" and author of the famous book "An Inquiry into the Nature and
Causes of the Wealth of Nations", spawned the discipline of economics by trying to understand why some nations prospered while
others lagged behind in poverty. Others after him also explored how a nation's allocation of resources affects its wealth.
To study these things, economics makes the assumption that human beings will aim to fulfill their self-interests. It also
assumes that individuals are rational in their efforts to fulfill their unlimited wants and needs. Economics, therefore, is a
social science, which examines people behaving according to their self-interests. The definition set out at the turn of the
twentieth century by Alfred Marshall, author of "The Principles Of Economics" (1890), reflects the complexity underlying
economics: "Thus it is on one side the study of wealth; and on the other, and more important side, a part of the study of
man."
so,,,,,
* Economics is best described as the study of humans behaving in response to having only limited resources to fulfill
unlimited wants and needs.
* Scarcity refers to the limited resources in an economy. Macroeconomics is the study of the economy as a whole.
Microeconomics analyzes the individual people and companies that make up the greater economy.
* The Production Possibility Frontier (PPF) allows us to determine how an economy can allocate its resources in order to
achieve optimal output. Knowing this will lead countries to specialize and trade products amongst each other rather than each
producing all the products it needs.
* Demand and supply refer to the relationship price has with the quantity consumers demand and the quantity supplied by
producers. As price increases, quantity demanded decreases and quantity supplied increases.
* Elasticity tells us how much quantity demanded or supplied changes when there is a change in price. The more the
quantity changes, the more elastic the good or service. Products whose quantity supplied or demanded does not change much with
a change in price are considered inelastic.
* Utility is the amount of benefit a consumer receives from a given good or service. Economists use utility to determine
how an individual can get the most satisfaction out of his or her available resources.
* Market economies are assumed to have many buyers and sellers, high competition and many substitutes. Monopolies
characterize industries in which the supplier determines prices and high barriers prevent any competitors from entering the
market. Oligopolies are industries with a few interdependent companies. Perfect competition represents an economy with many
businesses competing with one another for consumer interest and profits.
Economics may appear to be the study of complicated tables and charts, statistics and numbers, but, more specifically, it is
the study of what constitutes rational human behavior in the endeavor to fulfill needs and wants.
As an individual, for example, you face the problem of having only limited resources with which to fulfill your wants and
needs, as a result, you must make certain choices with your money. You'll probably spend part of your money on rent,
clothing and food. Then you might use the rest to go to the movies and will spend money on other less important needs. Economists are
interested in the choices you make, and inquire into why, for instance, you might choose to spend your money on a new DVD
player instead of replacing your old TV. They would want to know whether you would still buy a carton of cigarettes if prices
increased by $1 per pack. The underlying essence of economics is trying to understand how both individuals and nations behave
in response to certain material constraints.
We can say, therefore, that economics, often referred to as the "dismal science", is a study of certain aspects of society.
Adam Smith, the "father of modern economics" and author of the famous book "An Inquiry into the Nature and
Causes of the Wealth of Nations", spawned the discipline of economics by trying to understand why some nations prospered while
others lagged behind in poverty. Others after him also explored how a nation's allocation of resources affects its wealth.
To study these things, economics makes the assumption that human beings will aim to fulfill their self-interests. It also
assumes that individuals are rational in their efforts to fulfill their unlimited wants and needs. Economics, therefore, is a
social science, which examines people behaving according to their self-interests. The definition set out at the turn of the
twentieth century by Alfred Marshall, author of "The Principles Of Economics" (1890), reflects the complexity underlying
economics: "Thus it is on one side the study of wealth; and on the other, and more important side, a part of the study of
man."
so,,,,,
* Economics is best described as the study of humans behaving in response to having only limited resources to fulfill
unlimited wants and needs.
* Scarcity refers to the limited resources in an economy. Macroeconomics is the study of the economy as a whole.
Microeconomics analyzes the individual people and companies that make up the greater economy.
* The Production Possibility Frontier (PPF) allows us to determine how an economy can allocate its resources in order to
achieve optimal output. Knowing this will lead countries to specialize and trade products amongst each other rather than each
producing all the products it needs.
* Demand and supply refer to the relationship price has with the quantity consumers demand and the quantity supplied by
producers. As price increases, quantity demanded decreases and quantity supplied increases.
* Elasticity tells us how much quantity demanded or supplied changes when there is a change in price. The more the
quantity changes, the more elastic the good or service. Products whose quantity supplied or demanded does not change much with
a change in price are considered inelastic.
* Utility is the amount of benefit a consumer receives from a given good or service. Economists use utility to determine
how an individual can get the most satisfaction out of his or her available resources.
* Market economies are assumed to have many buyers and sellers, high competition and many substitutes. Monopolies
characterize industries in which the supplier determines prices and high barriers prevent any competitors from entering the
market. Oligopolies are industries with a few interdependent companies. Perfect competition represents an economy with many
businesses competing with one another for consumer interest and profits.
Nice collection of data on this topic.
ReplyDeleteDesire/wants keep growing in an economy but gets fulfilled as the needs r mate.