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Economics is basically the understanding of how different economies function. Economics is the study of how to best allocate scarce resources among competing uses. Scarcity in the economy is the main problem. There are not enough resources to keep up with the demand for them. Within the discipline of economics, there are two areas of study: Micro and Macro Economics.
Microeconomics is the study of an individual economy, or of the different segments within the larger economy, while macroeconomics is the study of aggregate economic behavior, or the economy as a whole(Madura 103). The main goal of macroeconomics is to determine the impact of consumer spending on total output, employment, and prices.
To fully understand economics as a whole, we must understand that there are limitations set by the available resources that are used to produce goods and services. These resources that are used in the manufacturization of goods and services are called factors of production. Land, labor, capital, and entrepreneurship. Land is the place used to produce the goods. Not only the physical land, but also resources such as oil, air, and water. “Labor refers not only to the number of people on the workforce, but the quality of the workers in the workforce (Mandura 115)”. Capital, the third factor of production refers to the goods used in further production. And finally, entrepreneurship is defined as the assembling of resources to produce new products.
A major area of concern among economists is opportunity costs. Opportunity costs are the products that are given up for another product. Because we have a limited amount of resources, we must find the most efficient way to use them. Production possibilities are the alternative combinations of all final goods and services that can be produced in a given time period with all available resources and technology.
The main objective of economist is to maintain maximum output in production. In order to reach maximum efficiency, there are three questions that economists have to address. What to produce? Who are we going to produce these goods for? And, how are we going to produce it? All of these questions were answered by Adam Smith, a famous economist. Smith believes that there is such a thing as an “invisible hand” of economics that acts as the decider to all the basic three economic questions (Group Presentation).
8. According to the book, economic resources are natural, human, and manufactured resources that are classified as land, labor, capital, and entrepreneurial ability; all of which are used in the production of goods and services (pg. 426). These resources are also called factors of production because they assist within the production process. They are also inputs because the goods and services are ingredients to help
Every society should answer three economic questions, which are what to produce? , how to produce? , for whom to produce? The reason why a society should choose what to produce is because a product of one society’s choice is not necessarily the choice of the other choice. A society should decide how to produce goods, it is due to the fact that not all societies have the same resources, some societies may have a lot of people in them so, if they want to produce a good, they can use their human resources to accomplished their task, in the other hand societies with a low populations but a high amount of machines, can use their resources to finish their task. Some countries may be able to provide items that other countries can not, because their economy is better than those countries.
Despite its size, only 190 pages, the authors address the basic concepts of economics while also applying those politically and for personal finance decision making. Those basic concepts include scarcity, gains from trade, marginal decision-making, profit management, income growth, and Adam Smith’s invisible hand theories are all discussed within the first part of the book; allowing readers to understanding the concepts, Gwartney applies the same concepts to the creation of wealth and the importance of competition, private property, open trade, monetary stability, and lower taxes. This book educates its audience by evaluating our economy and government mechanisms without the overpowering display of charts, formulas, and graphs; which you would typically see in a textbook allow...
The Economy is the backbone to society. There are many factors that operate in, and govern our society’s economical structure. Factors such as scarcity and choice, opportunity cost, marginal analysis, microeconomics, macroeconomics, factors of production, production possibilities, law of increasing opportunity cost, economic systems, circular flow model, money, and economic costs and profits all contribute to what is known as the economy. These properties as well as a few others, work together to influence the economy. Microeconomics and Macroeconomics are two major components. Both of these are broken down into several different components that dictate societal norms and views.
Adam Smith is widely regarded as the father of modern economics and one of the greatest economists throughout the course of history. He is mainly famous for a two books that he wrote, these two books are considered thee base and infrastructure of the world of economics. The two books he wrote were, “The Theory of Moral Sentimental” and “The Wealth of Nations”. But although Adam Smith was such a great economic philosopher, he wasn’t a very good foreteller or future predictor. The economic scenario now is very different from the economic landscape of the 1700’s. Giant super-corporations can now govern the flow of the market, unlike Smith’s time’s. Even though elements of Smith’s ideas have changed over time, some of his beliefs remain important factors in economics to this day. One of those truly unique philosophies is the “Invisible Hand”.
The foundation of every economy lies in the creation of goods and services. In Wealth of Nations, Smith encourages that nations maximize the number of these essential products in order to achieve greater wealth . The specific types of goods and services would be dependent on the personal interests and desires of consumers. In other words, the relationship between supply and demand dictates what types of commodities will be available.
Generally, it is a plow or a tractor. That is to say, land and labor are shared with manufactured resources in order to produce the things that we need. These manufactured resources are called capital, which consists of machines, buildings, and tools. Additionally, capital consists of enhancement to natural resources, such as irrigation ditches. Money is used to buy factors of production – it is not a factor itself.
More recently, entrepreneurship has also been added as one of these factors. Understanding these is essential to understanding the two production functions which this WIKI article focuses on. (2) Land Understanding what is meant by land is relatively simple. This comprises all of the natural resources that a particular producer has at their disposal. Most often this means immediate natural resources, like oil or the property on which the production facility is located.
According to Sloman (2003), many people think that economics is about money. Well, to some extent this is true. Economics has a lot to do with money: with how much money people are paid; how much they spend; what is costs to buy various items; how much money firms earn; how much money there is in total in the economy. But despite the large number of areas in which our lives are concerned with money, economics is more than just the study of money. It is concerned with the production of goods and services and the ...
Economics is the study of how best to allocate scarce resources throughout an entire market. Economics affects our lives on a daily basis, whether it is on a business level or a personal level.
ECONOMY: Economy as the first pillar mainly concerns with the allocation of scarce resources for optimum development. It involves the combination of available resources in their right proportions for the provision of goods and services. It is the careful use of resources and it involves the best combination of resources for optimum result. In public administration it is expected that quality public service be provided at the least possible cost. Public officials therefore must figure out how to provide services required by the people at the lowest cost through cost saving mechanisms while still maintaining quality. The employment of economics in the public sector ensures that resource usage is optimized and not wasted as usually happens in the public sector. Another dimension is to look at economy in terms of the deployment of resources in order to achieve the optimal benefit from them.
The crucial importance and relevance of economics related disciplines to the modern world have led me to want to pursue the study of these social sciences at a higher level. My study of Economics has shown me the fundamental part it plays in our lives and I would like to approach it with an open mind - interested but not yet fully informed.
According to McGutgan and Moyer: “Managerial economics is the application of economic theory and methodology to decision-making problems faced by both public and private institutions”. McNair and Meriam: “Managerial economics consists of the use of economic modes of thought to analyze business situations”. Spencer and Siegelman: Managerial economics is “the integration of economic theory with business practice for the purpose of facilitating decision-making and forward planning by management”. Haynes, Mote and Paul: “Managerial economics refers to those aspects of economics and its tools of analysis most relevant to the firm’s decision-making process”.
What is Microeconomics? This question was left unanswered when I initially enrolled in this course. Microeconomics is the social science that studies the implications of individual human actions, specifically about how those decisions affect the utilization and distribution of scarce resources. Microeconomics shows how and why different goods have different values, how individuals create more efficient or more productive decisions, and how individuals best coordinate and cooperate with one another. Microeconomics does not try to explain what should happen in a market, but instead only explains what to expect if certain conditions change. For instance, If the price of the new iPhone 8 is higher than the previous model will the consumer buy it? There are several elements that will play into getting an answer for this question, but gives you a general idea of what microeconomics entails.
Macroeconomics is the study of the economy as a whole, which looks at economic growth, unemployment and inflation. (Dobson and Palfreman, 1999) Government macroeconomics objectives can dividend into