When someone mentions Economics as a subject, the most common assumption that comes to the mind of every student is that it is dull and boring. Many senior school students don't opt for this subject because they think it is very difficult to understand its various concept. Even if they do choose the field, they doze off half the time during the classes. But if you study it with more interest and concentration, you will notice that it is one of the most applied subjects in real life. In fact, many of our day-to-day activities involve the use of the major concepts including production, distribution and consumption which are very helpful in taking certain decisions in our daily life.
First, what is Economics? Economics, in simple words, is the study of how society uses its limited resources. It is a social science that deals with the production and consumption of goods and services. It mainly deals with the four factors of production - land, labor, capital and enterprise is of two types.
Macroeconomics - The branch of economics that studies the overall working of a national economy.
Microeconomics :- The branch of economics that studies how households and business reach decisions about purchasing, saving, etc.
Let us see some of the major concepts that economics has taught us, which are important in
behavior:- The first and foremost lesson that economics teaches us is the optimum utilization of limited resources and for this, we need to adopt the national approach. When you buy something and pay tor it, you analyze the real-value of that product and whether it is worth spending that much money or not.
Opportunity cost:- When we spend money to buy a particular product, we let go of the other alternatives that we could have purchased with the same amount, this loss is referred to as the opportunity cost. It is a normal scenario that most of the people face in their life where they have to compare the value of two things and the gain that can be received.
Investment decisions:- Everyone intends to invest for better and higher returns in the future. Some of them may be profitable while some may result in the loss, but if you can evaluate the options available and the risk involved in each of them, then you can reduce the chances of huge loss. You would be able to examine the different choices whether you want to invest your money in fixed deposit, lend someone on high interest rate, buy gold / land, etc. by studying economics.
Various social-economics issues:-
Another important concept that economics makes us aware of is the socio-economic issues that we witness daily. It educates us about unemployment, poverty, the gross domestic product of a country, low economic growth, and how to overcome these challenges. Forecast and planning:- Although no one can predict the future, anticipating the possibilities and preparing for it can be learned through the study of economics. Economists can speculate the future inflation or deflation a country may face and can plan the finances accordingly. It also guides you to speculate the stock market and Inflation:- During inflation, supply of money increases in the economy and the value of money decreases. Many people take wrong decisions during this time and spend or invest money in an unsuitable direction. Economics help you to understand the concept of inflation better, and you can take accurate measures which can be beneficial for term. You in were just a few examples to show you the importance of economics in general life. There are other theories like the role of government intervention in the economy, global economy, macroeconomics etc.
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