What is economics

What is economics?

There is no single adequate definition of what economics actually is,

and

the

old

joke

that

“economics

is

what

economists

do”

is

hardly

helpful.

A

famous

economist

of

the

past,

Alfred

Marshall

(1842-1924),

said:

Economics is the study of mankind in the ordinary business of

life; it examines that part of individual and social action which

is most closely connected with the attainment and with the use

of the material

requisites

of well- being.

Economics has also been defined as the study of decision-making;

decisions

which

involve

choosing

between

alternatives

in

the

related

activities

of

earning,

spending,

producing

and

consuming,

all

with

the

object of achieving material well-being.

In

short,

economics

is,

like

sociology,

law

and

politics,

a

study

on

aspect

of

human

behavior.

It

is

important

and

relevant

to

all

of

us

because it is concerned with such everyday activities as buying things,

getting a job, using a bank and paying tax. Economics is concerns with

people’s wants, in particular the

ir material wants, and how they can be

satisfied.

Economics

is

often

thought

of

as

a

science.

However,

it

is

a

very

inexact

science

because

it

is

a

social

science,

and

is

affected

by

the

many influences that lead to

incessant

change. Human behavior cannot

be examined with the same precision with which a natural scientist can

examine

laboratory

specimens.

The

social

sciences,

which

include

economics, psychology, sociology, and political behavior, can never be

exact

sciences

since

human

behavior

is

extremely

difficult

to

test

or

measure. Much economic behavior is based on what is known as a value

judgment, which means it is based on the personal values of individuals

and so cannot be verified in a factual way. Economics is a living subject,

which is constantly developing and it affects us all.

To

understand

the

society

in

which

we

live,

we

must

be

informed

about

what

is

going

on

in

our

society

and

what

the

issues

are.

As

consumers

we

are

interested

in

the

goods

and

services

which

we

buy

and how much they cost us, and we are interested in the incomes we can

earn. We spend a great deal of time thinking about the money we earn

and the money we need. Workers are concerned with the availability of

jobs, wages and working conditions. Business peoples are interested in

the sale of their goods and the costs involved in the production of them.

Everyone

is

affected

by

depression,

inflation,

unemployment

and

government policies.

A knowledge of economics will allow us to analyze and assess the

values of policies and decisions made by politicians, and it will help us to

become

more

aware

of

the

current

and

future

problems

of

our

society

and therefore better able to

cope with

them. We are all consumers and

most of us read the newspapers, so it is up to us to understand what is

going

on.

Even

our

own

personal

decisions

are

often

affected

by

the

state of the economy, so we could make better choices if we understood

the way the economy operates. An economy is often affected by factors

such as the use of technology, the actions of the government, industrial

relations, and overseas trade. All of these influences result in constant

change.

Prices

seem

to

rise

constantly.

Some

jobs

are

no

longer

available, while new types of jobs appear. Changes in employment and

prices affect almost everyone.

Employment

and

the

types

of

jobs

available

are

all

part

of

the

economic pattern. Some jobs may involve extreme specialization, such

as

making

just

a

small

part

of

something;

others

demand

professional

skills.

All

of

these

activities

enable

us

to

have

a

variety

of

goods

and

services, but while economic activities satisfy our wants, there are also

economic

problems

to

be

faced.

The

economic

system

is

made

up

of

human

beings

and

so

human

behavior

is

crucial

to

the

system.

The

principles

and

motives

form

which

people

act

are

not

necessarily

economic

in

origin,

and

are

often

based

on

non-economic

values.

Differing

values

and

social

forces

have

led

to

countries

developing

different

economic

systems,

but

all

countries

face

the

same

economic

problems

—

such as whether they are producing the right things and by