what is economics – Definition of Economics
According to definition of Marshall
Economics is a study of people as they trade,live and interact in the normal business of life.
He asserted about economics that on one hand Economics is a study of wealth and on the another hand It is a study of man.
Marshall defined economics in his word that wealth is not an end in itself. It is the mean of ending of human welfare.
better authentic definition of economics was given by Lord Robbins in 1932 in his book “An Essay on the Nature and Significance of Economic Science”.
Robbins said both the wealth and human welfare should not be considered as the subject matter of economics. His defined the Economics as
Economics is the science which tells us the alternative uses about the human treatment as relationship between scarce means and its ends.
Economics is a Social Science related with the distribution, production and consumption of goods and services. It tells us how Individuals, Governments, Businesses and nations make preference for the allocation of resources.
Economics focuses on the actions of human beings, based on assumptions that humans act with rational behavior, finding most gradely level of benefits.
Economics is especially connected with the effective quantities in form of the production and uses and exchanging of the models and there will be assumptions to perceieve to make policies and incentive that will maximize optimality.
There is two types of Economy
1)Microeconomics
2)Macroeconomics
1) Microeconomics
Microeconomics is the study of decision making of the people and businesses of any country regarding the allocation of resources and prices at which they import and export the goods and services. It considers taxes, regulations and government legislation.
Microeconomics is based on supply,demand and other forces which determine the price levels in the economy. Its a bottom-up approach in the economy to amputation the economy.
In other words, microeconomics tries to understand human preferences, decisions and the allocation of resources.
There are few key in Microeconomics
Production Theory
study of how goods and services are created or manufactured.
Costs of Production: This theory includes the price of goods or services is determined by the cost of the resources used during production.
Demand, Supply and Equilibrium
Prices are determined by the law of supply and demand. In the perfectly competitive market, suppliers offer the same price demanded by consumers. This creates economic equilibrium.
Labor Economics
its focuses at employers and workers and effort to learn the patterns of wages, employment and income.
Costs of Production
This theory includes the price of goods or services is determined by the cost of the resources used during production.
Macroeconomics
Its study the preference and nature of a country and how its policies impact the economy as a whole. It analyzes entire industries and economies.
Macroeconomics explained the specific economic dimension such as gross domestic product (GDP) and effect on the economy due to the changes in unemployment, national income, rates of growth and price levels.
Macroeconomics analyzes how an decrease or increase in net exports impacts a nation’s capital account. Its gives us the realtion between Unemployment rate and GDP of any specific location or country.
Macroeconomics keep eye on cumulous and econometric relationship, which is why governments and their agencies rely on macroeconomics to formulate economic and fiscal policy. Investors keep a close eye on monetary and fiscal policy due to buying the interest-rate sensitive securities should.
It gives us clarification regarding with the performance, structure, and behavior of the entire economy whereas microeconomics is more focused on the choices or preferences made by individual people in the economy.
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