Economics is studied by students all around the world and it has become a course which is taken for university majors as well. In the world of rising inflation, unemployment, and exchange rates, the subject of economics holds enormous importance. The study of economics includes using resources in an efficient way. The world in which we live comprises limited wealth, resources as well as time. Economics is about making choices. We use economics in our daily lives.
With limitations, we have to make choices and choose alternatives in an efficient way. When we go out shopping we think about whether we should buy clothes, watch a movie or eat delicious food but with a limited amount of money, we have to choose one of these things. An entrepreneur has a limited amount of money and he has to make choices in an efficient way to make the most of the limited resources he /she has. For instance, a decision to buy a production machine or hiring human labor is a choice for the entrepreneur. Both involve the utilization of money. In case he decides to buy a machine for more perfection in production he has to spend money on its maintenance every week or month.
After some time the machine can become outdated according to the production standards then he may have to think about buying another one. In the case of hiring labor, he has to keep in mind the daily wages he has to pay to the employees.
Moreover, he has to keep in mind the daily production or the amount of work each employee is doing every day in order to meet the standard demand. Therefore, he has to make the best choice among the alternatives he has in order to increase efficiency, save time and maximize production for optimum growth.
Categories of Economics
Economics fall under two categories: microeconomics and macroeconomics. Macroeconomics is the study of the whole economy of a country while microeconomics deals with smaller aspects of the economy.
Why is Economics Important?
Economics is important because as human beings we have unlimited wants and desires and very limited resources to fulfill them. The wealth we have is limited and insufficient to meet all our wants and desires, therefore, economics provides us the option of choosing the best alternative among the limited choices we have.
If all the people in the world have unlimited wealth all will be happy sitting at home and will not need to work but unfortunately, that is not the case. Through economics, we learn to make the best choices with limited resources at our disposal.
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