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History of economics thought part two
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In the simplest way, Economics is the studying of how money operates & how that capital is exchanged between consumer & the business. There are two main branches of economics.
• Microeconomics
• Macroeconomics
Microeconomics
Microeconomics is a branch of Economics which study how individuals or business firms allocate or manage scarce resources. Supply, demand, elasticity of price, quantity of demand & quantity of supply are some concepts of Microeconomics.
Macroeconomics
Macroeconomics flows on a wide area rather than microeconomics. It describes about the structure & the behavior of whole economy. It consists of larger concepts such as inflation of the country, unemployment, international trade & market, national demand etc.
Study.com. 2018. What is Economics? - Definition & Principles - Video & Lesson Transcript | Study.com. [ONLINE] Available at: https://study.com/academy/lesson/what-is-economics-definition-principles-quiz.html. [Accessed 06 January 2018].There are key principles of the microeconomics which are as follows,
1. Supply, Demand & Equilibrium
Demand is the quantity requirement over a product or a service on a specific price at a specific time period. The law of demand describes that Demand is more at lower prices than the higher prices while the other things being equal.
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Afterwards the findings are discounted and compared with the initial investment. A high ratio for the NPV is considered as a good result. With the higher ratios for NPV the company can be considered on investments and when lower the NPV is the same will be rejected. Because the company insufficiency to cover the expenditure or the cost occurring for the project. The NPV is a good investment technique in financial appraisal as it adjust for timing of project’s cash flow. With the value of NPV states that an investment should only take place when only having a positive NPV ratio which is a higher
This highlights that a core principal of economics is the decisions and choices to be made in order to manage limited resources. Furthermore, that microeconomics pertains to the behaviours that affect these decisions and choices made at an individual level. As demonstrated by the avocado industry recently, motives and variable factors for increases/decreases in supply and demand will not always be transparent to the consumer. Therefore, to have an understanding of the concepts of microeconomics and the market can elucidate the individual consumer’s decision making rationale rather than making
Economics is the study of how best to allocate scarce resources throughout an entire market. Economics affect our lives on a daily basis, whether it is on a business level or a personal level.
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.
The law of demand states that if everything remains constant (ceteris paribus) when the price is high the lower the quantity demanded. A demand curve displays quantity demanded as the independent variable (the x-axis) and the price as the dependent variable (the y-axis). http://www.netmba.com/econ/micro/demand/curve/
Economics is defined as is the social science that studies the production, distribution, and consumption of goods and services. It primarily deals with the exchange of value and that labor or human effort is the source of all value. The field may be divided in other ways, most commonly microeconomics vs. macroeconomics. Microeconomics examines the economic behavior of individual units, including businesses and households, and their interactions through markets, given scarcity and government regulation. Macroeconomics examines an economy as a whole "top down" with a view to understanding interactions between the broadest aggregates such as national income and output, employment and inflation and broad aggregates like total consumption and investment spending. Econometrics is the application of statistical techniques to measuring economic phenomena.
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.
Perhaps one of the most fundamental principles of microeconomics is that people face tradeoffs. According to Mankiw, “making decisions requires trading of one goal against another.” This situation of facing tradeoffs stems from the concept of scarcity - which in essence is limited resources - forcing one to make decisions and tradeoffs between several options. A concept well associated with this is opportunity cost - which is defined as how much one has to give up (the cost) in order to get the good or service (generally the alternative desired or wanted). Opportunity cost is also commonly defined as “the value of the next best alternative in a decision.”
It is the role of every government to safeguard its people in all matters including controlling the economy. Every economy faces different challenges including the business cycles that may emanate from the global market. In this paper we try to examine measures taken by the UK’s coalition government in trying to ensure that the economy benefits every citizen and reduces the overall burden to it. We consider the recent comprehensive review on spending.
=== A study of economics in terms of whole systems especially with reference to general levels of output and income and to the interrelations among sectors of the economy is called macroeconomics. Macroeconomics is concerned with the behavior of the economy as a whole—with booms and recessions, the economy’s total output of goods and services and the growth of output, the rates of inflation and unemployment, the balance of payments, and exchange rates. Macroeconomics deals with the increase in output and employment over long period of time—that is economic growth—and with the short-run fluctuations that constitutes the business cycle. Macroeconomics focuses on the economic behavior and policies that effect consumption and investment, trade balance, the determinants of changes in wages and prices, monetary and fiscal policies, the money stock, the federal budget, interest rates, and national debt. In brief, macroeconomics deals with the major economic issues and problems of the day.
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 ...
Microeconomics may reveal outcomes as assured; therefore it is overdetermined, and this is contrasted with macroeconomics as being underdetermined. Understanding the principles of microeconomics is untroubling for economists when they gain an ability to contemplate systems. Moreover, the natures of truth in the world of microeconomics can be puzzling, but there are some foundations which allow flotation of the proverbial watercraft.
In the first portion of our class we discussed economics we discuss the small units and date in larger units of macro micro economics we talked about how taxpayers of help and paid higher taxes and we talked about the unattainable and attainable statuses of each country.
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”.
The economists says Economics is a study of production ,distribution and consumption of wealth in society, Its basic function is to study how human activity at individuals, households, firms and national level to maximize their gains from their limited resources and opportunities. People have limited number of needs and wants which must be satisfied such as food, clothing, shelter and other stated needs. Some of them are material needs, psychological needs, and emotional needs. However, no one would choose to live at the level of basic human needs if they want to enjoy a better standard of living. This is because human wants (desire for the consumption of goods and services) are unlimited. Every individual has their own tastes and preferences, it doesn’t matter whether a person belongs to which social class, and he or she wants always something more. Therefore the basic economic problem is that the resources are limited but wants are unlimited which forces us to make choices. Economics is the study of this allocation of resources, the choices that are made by economic brokers. According to Adam Smith, the Father of Economics, defined economics as the study of nature and uses of national wealth
The definition of microeconomics was presented a high level, and I was still left drawing a blank trying to discover how this method of social science correlated to my everyday life. Starting from week one Professor Julie Pelia assigned us topics that engaged our minds, and I quickly began to see how the various components of Microeconomics fit into my life. This summary of Microeconomics will cover some of