Economics is the study of how people, firms or institutions choose to allocate resources. People make economic decisions with the intention of maximizing their return. However, everyone incorporates tenets of this field into their lives on a daily basis. Some of the most important life decisions are made using economic reasoning. Before deciding on any of these events, a person performs what economists call a cost-benefit analysis.
Economics affects our life in many aspect. From the moment we wake up to the moment we go to sleep. Most people are interested in their own situation, which makes microeconomics more influential and important, but what they hear about in the media is macroeconomics such as the consumer price index, inflation, recession. It’s often hard for the individual to see how it all touches him or her. It’s relatively easy to see an economy in the goods and services that we depend on every day, but far harder to see how they tie together at all levels.
Economics helps individuals and businesses to make informed decisions in different fields. Typically, all people are affected by economics in one way or another. It is not only important in education but also in making critical analysis in different situations.
When making decisions we don’t look at leading economic indicators. But, perceptions about the economic outlook can influence certain decisions. Considering opportunity cost can help us make better decisions. If we act on instinct, we may choose the easiest course of action, but the best decision in the short-term may not be best in long-term
In essence, economics is how people allocate limited resources to satisfy unlimited wants. Economics affects everything. Economics is not just useful as a way of thinking but also a discipline that changes real, tangible things in the world.
Familiarity with the breadth of economics alone is not only necessary but also understanding its impressive scope is the best start. We are always making decisions about our time or our money and economics make sense of those decisions. Ultimately, the goal is to use that information to figure out how we can make better ones for both ourselves and for others.
Unlike most things in life, economics gets right to the point. It’s cold and objective, but also realistic.Being aware of the current economic situation is vital in buying and selling. People tend to talk how economics affect them as buyers, sellers, investors, workers, producers, consumers among others. Therefore, economics gives people the knowledge on how to understand and interpret different situations.