Understanding Economics is not as easy as one may think. For a long time now, there seems to be a common misconception that Economics is all about money. This is absolutely not true, and there is more to Economics than just finance.
While there are most definitely monetary elements present in the study of Economics, the meaning of Economics is all about getting the best possible use out of all types of resources. This includes a large variety of resources, some of which include land, technology, equipment, labour, capital, time etc.
Economics deals with the laws and principles that govern the functioning of an economy and its numerous parts. Strictly speaking, economy exists because of two basic facts of life. Firstly, because of the unlimited human want for goods and services and secondly, the scarcity of the resources that are used to supply such goods and services. Because of these two reasons, an economy has to decide how to best utilise its scare resources in order to obtain the maximum possible satisfaction of the members of its society. It is the basic problem of scarcity that is the root cause to so many economic problems in the world today.
For about two centuries, economics was considered a non-exact science. This view has all been changed due to the arrival of modern technology. Economists now have the ability to foresee how several variables can and will affect business, the government, industry and everyday citizens and organisations.
There are many substitutions that offer very valuable economics degree courses, it an extremely interesting course to complete, and not to mention, it’s a very beneficial credential to have on your CV. The subject matter of economics can be divided into two parts: microeconomics and macroeconomics.
Microeconomics refers to the study of a particular unit within the national economy. For example, it can refer to the economic behaviour of an individual, a firm or an industry who is a component of the national economy. You may come across any of the following aspects when studying microeconomics:
- Product pricing
- Factor pricing
- Consumer behaviour
- Economic conditions of a selection of the people
- Study of a firm
- Location of an industry
On the other hand, macroeconomics refers to the study of behaviour of the large aggregates which may be present in any given economy, such as the total population and total consumption. It includes:
- National income and output
- Balance of trade and payments
- External value of money
- General price level
- Saving and investment
- Employment and economic growth
So, the next time you hear the word “Economics,” don’t just think about money. Think efficiency, think resource allocation, think productivity, and then you’ll be thinking like a true economist!!