Why Do You Think It Is Important to Study Economics? Essay Example

Why Do You Think It is very important Study Economics? Essay

With this essay, this is my objective to be able to be able to demonstrate the importance and value of economics within our daily lives. The Internet has been mostly used as support in completing this composition. Also, the information in this article are gathered and examined from various Internet internet pages and textbooks that you can get in the list regarding references at the end of this project. To begin with, I shall start with the particular definition of economics. At this time there is no exact definition of economics as it differs from the opinions among economist.

On the other hand, many have chosen to agree with Alfred Marshall, a leading 19th century English economist, that economics is “a study of mankind in the ordinary business of life; this examines that part regarding individual and social activity which is most strongly connected with the achievement and with the use of the particular material requisites of wellbeing. ” In other phrases, in addition, it means that economics is a study associated with how in our every day lives certain actions or perhaps decisions are related in order to the acquisition and use of material requirements within our daily routines.

Additionally, economics is the study of how hard to find or limited resources are used accordingly to fulfill people’s unlimited wants and wishes. It is concerned with exactly how people make decisions within a regarding scarcity. In brief, if there is zero scarcity there would be no point in studying economics. Perhaps one of the most fundamental concepts regarding economics is demand plus supply. It is since of demand and source that we are compelled to make choices since generally demand is great but at the same exact time we are missing in supply.

Firstly, demand refers to be able to how much or typically the volume of a product or service that is desired by simply buyers. The amount demanded is usually the amount of an item that people are willing to be able to purchase with a certain cost; the relationship between cost and quantity demanded will be known as the need relationship. Whenever we were to look closer there is a Law regarding Demand which states of which holding all nonprice aspects constant, being a product’s value increases, the quantity of the product demanded decreases and as a new product’s price decreases, typically the quantity of the item demanded increases. Refer to Graph 1 inside the Appendix to see an instance of a requirement curve. ) Secondly, supply represents just how much the market will offer. It is defined while the different levels of the good or service that a seller would make available for sale at various prices in a particular period. The quantity provided regards the amounts associated with a certain good producers are willing to offer when receiving a particular price. The correlation between price and just how much regarding a good or service is supplied to typically the market is known as the provide relationship.

Want the Law of Need, there is also a Law of Supply which usually holds the definition of which holding all nonprice factors constant, the quantity regarding a good or support that a supplier is willing to offer on the market relates straight to price. Meaning that since the price increases, the particular quantity supplied increases as well. The reason for the reason being sellers’ would prefer to sell more in higher prices so of which they can cover expenses and at the exact same time earn money. (Refer to Graph 2 inside the Appendix to see a good example of a supply contour. )

One more idea of economics which to some extent encompasses demand and supply is monopoly. Based about economics context, a monopoly is a market structure in which there will be only one producer or even seller for a manufacturer or service. In additional words, the only business is usually the industry. Entry into such a market is impossible and highly constrained as a result of high costs or perhaps other impediments which may possibly be economic, social or perhaps political. For instance, Stamina Nasional Berhad b(TNB) will be an sort of a business which holds a monopoly on electricity generation, transmission and distribution in Peninsular Malaysia.

It is impossible for brand new sellers to enter into the market as they would not be able in order to obtain permission to operate from the respected expert. Monopoly is one associated with the two extreme forms of market structure, the opposite is pure competition. Pure competition is and also by a large number of sellers producing many products that are similar in nature and because a result, becoming alternatives. It is easy to gain entry right into a simply competitive market and in addition effortless to exit it. You can find few, if any, barriers to entry and the prices are determined by simply the demand and provide of the market.

Most agricultural products including potatoes or wheat are supplied by individual sellers in a purely competitive market. You can find hundreds or thousands of independent sellers who compete against one another to be able to gain profit. In economics, the scope is really wide. Hence, the examine of economics is organized under two major vantage points from which our economy is observed: macroeconomics and microeconomics. Macroeconomics concerns the functioning of the economy as a whole and the interactions of the major groups like the household, business, federal government, and foreign sectors inside the economy.

After observing society since a whole, Adam Cruz noted that there was initially an “invisible hand” that turning the wheels of the economy: a market pressure that helps keep the economy working. Macroeconomics helps us know the roles of the household, business, and government areas plays in the economy, and how the sectors connect to each other. Additionally, it informs us about the particular problems that arise found in the economy all together and how those problems could be resolved. One associated with the primary issues inside macroeconomy that needs in order to be overcome is unemployment.

The effects of unemployment are economical loss for society because well as hardships that must be faced by individuals. Another issue that will impact the economy is usually inflation. Similar to unemployment, pumping can incur adverse effects. Inflation occurs when presently there is an increase within the general level of prices. It does not mean that the purchase price is high yet rather they are increasing. Next, microeconomics concentrates on the conduct of individual businesses plus households and on specific item and resource markets.

It tends in order to be more scientific in the approach, and studies typically the parts that make up the whole economy. It analyses certain aspects of human behaviour. Microeconomics shows all of us how individuals and companies respond to changes in price and why these people demand what they perform at particular price levels. 1 of the parts of which make up the entire overall economy is called households. Children is made up of a new person living alone or a group of connected or unrelated persons living in a residence, an apartment or even any other housing device.

All of us are supposed to be to a household in addition to in order to get by each day, we are required to spend money. The majority of of the spending of which we do comes from the income that people generate and to earn revenue we sell our time. Every household’s income varies with gender, age, or perhaps education of the head of the household. Yet what is the use of income? Basically, families use their incomes for three purposes: spending, keeping and paying taxes. Typically more than half of the income usually moves to spending plus the sleep goes to saving in addition to paying taxes.

Another sector which is usually studied in microeconomics will be the business sector. The business is an company established to produce plus sell goods and services. Business selections especially about output plus prices can have a new powerful influence on typically the economy. Large firms which employ huge numbers of people can have got a significant impact on employment conditions in an industry or region and firms with a substantial share of a market that will accounts for a considerable level of consumer spending can give rise to inflation by elevating their prices.

Businesses can be within the legal forms of these three: proprietorship, partnership or even corporation. As much since you should know the extremely basics of economics, that is also important in order to be aware of the impact of economics on ourselves plus the society. First of all, economics made me realise that possibly in the future we all may face a serious issue where our resources are really very much inadequate to meet our wants. I also learned the meaning associated with opportunity cost whereby I am compelled to consider my decisions create worth judgements.

Learning economics also offered me a new clearer idea of how and why prices of certain products escalates and falls. On the other hand, for businesses and firms, they would benefit when you are able to be familiar with the industry and save costs in case possible because they are aware of price elasticity, buyers’ requirement and also to appearance out for competition. Along with the knowledge of economics, firms can plan for short-run and long-run charges and therefore come with a possibility in maintaining profit maximisation or minimising loss.

In an economic system, the federal government holds a lot of influence in the spending of other areas through the taxes that will are imposed. The federal government can use its shelling out and taxing to modify the direction of the economy. Thus, it means that that the government must possess the right economic state of mind lest the overall economy goes into turmoil. Money policy should be practised by the government to be able to reduce unemployment by inserting more spending into the economy through increased government purchases, increased transfer repayments and/or decreased taxes.

Finally, if we were to envision an entire society with the right economic way of thinking, after that there would be very little situations of poverty, disemployment and people with regards to debt. People would get more careful in investing and understand what possibility costs and trade-offs are. As a final term, I would like accumulate everything I have described above and simplify it into a single statement that having some type of knowledge in economics will help people set aside their money expenditure correctly as well as know where the part of their earnings goes to, like for example government taxes.

It does not matter if that is just basic knowledge you have, just the very fundamentals can aid you manage your everyday choices and decisions not really only in monetary factors but also your lifestyle in general. REFERENCES About Economics unknown, online, retrieved 18 August 2008, from http://economics. acadiau. ca/About_Economics/about. htm Sloman, J, Smith, P, Taylor, R unknown, Frequently Questioned Questions – Why Research Economics?, online, retrieved 16 August 2008, from http://whystudyeconomics. ac. uk/faq/economics. htm Moffatt, M unknown, Why Study Economics? online, retrieved something like 20 August 2008, from http://economics. about. com/cs/studentresources/a/why_economics. htm Economics unknown, online, retrieved 20 August 2008, from http://www. mcwdn. org/ECONOMICS/EconMain. html Exactly why Study Economics? unknown, online, retrieved 20 August 08, from http://www. bookrags. com/essay-2005/2/7/18301/96642 H., N unknown, A good Introduction To Supply Inside Economics, online, retrieved thirty August 2008, from http://www. helium. com/items/690611-an-introduction-to-supply-in-economics Introduction In order to Economics unknown, online, recovered 20 August 2008, from http://www. conguru. com/introduction_to_economics/ The particular Importance Of Economic Reports unknown, online, retrieved 28 September 2008, from http://www. ymsite. com/books/eepie/studies. htm Economics unknown, online, retrieved 30 September 2008, from http://www. britannica. com/EBchecked/topic/178548/economics/38847/Definition Economics Essentials: Demand and Supply unknown, online, retrieved 30 Sept. 2010 2008, from http://www. investopedia. com/university/economics/economics3. asp Welch, L. J & Welch H. F 2007, Economics: Concept and Practice. 8th edn, Wiley

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