What is Economics?

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What is Economics?

Economics is all about decision making in our day to day life. At this point one must keep in mind economics doesn’t only pertain to money. It is about weighing different choices and alternatives. A more defined definition of economies would be the scientific study of ownership, usage, and exchange of scarce raw materials. It can also be regarded as a social science because it uses scientific methods to build theories that can help explain the behaviour of individuals.

Based on methodology economist aren’t able to undertake controlled experiments. Economist have to simply employ different methods based on observation and deduction.

To elaborate further: a social science concerned with the factors that determine the production, distribution, and consumption of goods and services.

Economics focuses on the behaviour and interactions of economic agents and how economies work. In the same light microeconomics and macroeconomics are to be noted.

Microeconomics examines the behaviour of basic elements in the economy, including individual agents and markets, their interactions, and the outcomes of interactions whilst macroeconomics.

Economic analysis may be applied throughout society, as in business, finance, health care, and government the ultimate goal of economics is to improve the living conditions of people in their everyday life.

The study of economics is based around three related investigative questions:

1.       Why are scarce resources exchanged?

2.       How consumers and producers behave as they interact with each other in markets, in their attempt to achieve mutually beneficial exchange?

3.       The role of government in compensating for the limitations of markets in achieving mutually beneficial exchange?

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