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Relevance of economics in day to day life
Relevance of economics in day to day life
Basic terms of economics
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The economics, as an independent subject has already existed in this world for a long time. Maybe some people believe that the knowledge which is contained in economics is so far from them that it is not necessary to consider about is. Actually, economics always hides in our daily life and effects decisions what we made. Once I have hold the same opinion of economics is not really my business, but I do not think like this any more after I studied this subject. Economics no longer acts as an abstract terminology lying on the textbook far away from me, this word became meaningful and I am sure it will make some changes not only in my mind, but also in my future life. It is really a difficult job to define what is economics. Perhaps many people …show more content…
There are two reasons help us to answer this question. Firstly, as it mentioned above, economics could provide supports to help people make right decisions. Everyone have to make a considerable amount of decisions in life and work, no matter they are politicians or housewives. For example, a wise politician makes use of economics theory to make economic decisions in order to run the country well and bringing prosperities to people. A smart housewife knows that breads’ and vegetables’ prices are economical in the afternoon under economics’ guidance. Some common rules hide incredible economics theories people might never notice because it seems so simple in the normal life. If we known these theories, we can take advantages of it to make right decisions at vital moment. Secondly, economics, as one of the most important subjects in academic circle, playing a significant role and affecting many aspects of our life. Before I study economics, I found many strange things whereas I can not explain by using common sense. For example, why are diamonds so much more expensive than water even thought water has vital importance to human existence than diamonds? Why does government levy taxes on merchandises to increase citizens’ financial burden? Why does the fast food restaurant drink can be refilled for free? After I learned the marginal cost and …show more content…
The basic needs of people ought to be satisfied, in order to guarantee their sense of happiness. Although people have boundless needs and wants, the resources available to us are limited, that is what we called the scarcity of resources. If we want to make maximum utilization of limited resource, which determines we have to make decisions when we are facing choice. At this time, the theory of opportunity cost should be put forward. Let me take myself as an example, after I graduated with my bachelor’s degree last year, there are three opinions available to me to be chosen. The first one is to look for a job like most graduates. Then I will earn salary earlier and gain more working experience than the master graduate. The second choice is to take part in the postgraduate entrance exams in my own country. In this way, I need to spend two years on the subject I have no more passion to research. And the last one is go abroad for further study of a totally strange major which is different from my undergraduate major. After I weighed and balanced over and over again, I chose the last one which I am really interested in. Though it requires me to devote more effort than other classmates who have already learned about the relevant professional knowledge. I had no idea what is opportunity cost at that time, but I made use of it
To become an Economists one must study a wide variety subjects in math and science. To get the best jobs at the best firms, a Ph.D. or masters is preferred, but it is possible to get a job with a bachelor's degree(“Economists”). Because of the skills required to study economics, courses in mathematics, statistics, econometrics, sampling theory and survey design, and computer science are extremely helpful (“Economists” Truity.com). Undergraduate economics majors can choose from a variety of courses, ranging from microeconomics, macroeconomics, and econometrics to more philosophical courses, such as the history of economic thought. Economists have to have a general understanding of their field. However they often specialize in one or two categories (“Facts about Economists”).
Classical economists such as, Jean Baptiste Say, Adam Smith, David Ricardo, and Thomas Robert Malthus, had a different view about the role of the government in a capitalistic society. The classical economists believed in a laissez-faire economy. They believed that the government should keep their hands off the nation’s economy. They felt that the market will be able to keep itself stable, without the intervention of the government. Jean Baptiste Say believed that supply would create its own demand. The classical economists had an assumption that the aggregate production of goods and services in the economy generate enough income to purchase all output. They also had the assumption that savings by the household sector matches investment expenditures on capital goods by the business sector.
To understand the world we live in today, we need to understand what economics is and where it came from. Economics is the social science concerned with the production and consumption of goods, services, and the analysis of the commercial activities of a society. Economics also deals with the choices we make to fulfill our wants and needs and how we spend and invest our money. It is split into two main parts known as macroeconomics and microeconomics. Macroeconomics is the study of national or international economies while microeconomics studies individuals or firms within the economy. Adam Smith is widely known as the founding father of modern day economics, but it is actually an Irish banker Richard Cantillon. Richard Cantillon wrote his book “Essai sur la Nature du Commerce en General" which translates to “An Essay on Economic Theory” in the 1730’s
The “best option” cannot be argued in a general sense; it instead must be evaluated on a case by case basis. For example, from an economic standpoint that considers the constant increase in knowledge required to maintain a significant position in the economic hierarchy, the “best option” for a student immediately after high school graduation may be vocational training at a specialized institution.
Economics as stated in the introduction is “the study of choice.” Economics does not tell us what to choose or how to choose it, only the consequences of our choices. Over the centuries, economists have always been labeled negatively for their theories that state successes doesn’t occur without sacrifices. Economists are though to be the source of disappointment, but on the contrary are trying to better the world (Buchholz, 17).
It is the study of resource allocation, distribution and consumption, of capital and investment, and of the management of the factors of production. (http://wikitionary.org/wiki/economics)
The theory of economics does not furnish a body of settled conclusions immediately applicable to policy. It is a method rather than a doctrine, an apparatus of the mind, a technique for thinking, which helps the possessor to draw correct conclusions. The ideas of economists and politicians, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." (John Maynard Keynes, the General Theory of Employment, Interest and Money p 383)
When we see economic terms and theories they can seem a bit overwhelming or complicated, but often they are just a scientific or mathmetical way to explain things in the world around us that most of us take for granted or chalk up to common sense.
The study of economics is important to everyone. Financial decisions affect everyone in their day-to-day routines. Economics is the study of how society manages its scarce resources (Mankiw, 2012). Macroeconomics is the study of economy wide phenomena, including inflation, unemployment, Gross Domestic Product, and economic growth (Mankiw, 2012). Macroeconomics is important because, it is how all of us relate into markets and economies. Many news articles today are centered on the economy and current events. One of these articles lends itself to many economic principles and ideas. Even though there are many important topics not covered in the article, the article titled, "You Are What You Owe" in Time, encompassed many general economic principles as well as the many macroeconomics indices illustrated in the article.
To what extent if any has your knowledge of psychology helped you to understand other people and grow as a person?
Economist believe there are four basic principles to individual decision-making, they are people face trade-offs, the cost of something is what you give up to get it, people are rational, and people respond to incentives. Costs and benefits are key factors that all economic decision makers take into account. They believe that for every decision, something must be gained and something must be lost. The...
Economics is probably the science that arguably has had the most impact in today’s times. In fact it can barely be called a science in a strict sense, since human behavior is not governed by laws of nature unlike other non living objects, which makes the prediction and forecasting stock prices, economic conditions all the more difficult. In recent decades economists have tried to give a more structured and mathematical explanation to their theories concerning how human beings make their decisions. However these theories have come under immense criticism as they don’t hold true in real time. In reality, human beings rarely behave rationally which is the basic assumption in many of the economic theories; rather we make a lot of our decisions based on our intuition and limited knowledge available to us. When the financial crisis of 2008 came upon us, a lot of questions were raised on the apparent predictive abilities of the various economic theories. Merely 12 economists were able to foresee the massive crisis which now shows signs of deepening into a double dip recession.
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 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.
In today's world, economics associated disciplines are of fundamental significance and application and this has encouraged me to pursue a degree in Economics. Economics has an important relevance in all of our lives. As consumers we try to make the best of our limited incomes. As workers we take our place in the job market. As citizens of a country our lives are affected by the decisions of our government: decisions over taxes, decisions over spending on health and education, decisions on interest rates, decisions that affect unemployment, inflation and growth. As dwellers on the planet Earth we are affected by the economic decisions of each other: the air we breathe, the water we drink and the environment we leave for future generations are all affected by the economic decisions taken by the human race. It is these stimulating issues that excite me about economics. I enjoy studying Economics enormously and believe my passionate interest in economics is continually strengthened by my regular reading of 'The Economist'