Tuesday, July 5, 2016

Economics

Economics is the social science that studies the production, distribution and consumption of goods and services.
Economics is the study of how people choose to use resources. Resources include the time and talent people have available, the land, buildings, equipment, and other tools on hand, and the knowledge of how to combine them to create useful products and services.
Economics studies how people appear to use the resources available to them to improve their well-being. Well-being includes the satisfaction people gain from the products and services they choose to consume, from their time spent in leisure, and with family and community, as well as in the jobs, and the security and services provided by their governments.
Economics is the science of choices. Scarcity is the core problem of economics. The fact that the available resources are insufficient to satisfy all desired uses thereof.
Economics tries to explain the choices people or households or businesses (economic agents) tend to make under different circumstances based on self interest. Choices such as how much time to devote to work, to school, and to leisure. How much money to spend and how many to save or invest, and how to combine resources to produce goods and services, and how to vote and shape the level of taxes and the role of government.So Economics can be considered as the study of decision making.

Economics explains how people want certain things to improve their living standards and can change their behaviour to get those things, in other words people will respond to incentives. Lower tax rate in another country and higher wages motivates an individual to move overseas. Lower wages in another country provide an incentive for a factory to relocate to that country. High tax rates motivates people to look for ways to invest their extra income in insurance or govt. bonds and securities because they want to keep more of their money for themselves.
Hence, economics include the study of labour, land and investments, of money, income, and production, and of taxes, and government expenditures.
Economists seek to measure the well-being of people in a society or a country, to learn how well-being may increase overtime, and to evaluate the well-being of rich and poor.
They help the governments to make policies and advice how to avoid problems such as inflation and unemployment, and to determine the level of taxes in order to improve the living standards of it's citizens. Along with individual behaviours, economics also addresses the collective behaviour of businesses and industries and countries and governments.