Im­por­tance of Eco­nom­ics

Panay News - - BUSINESS - By Ma. Aprilin A. Malicu­dio, Du­marao, Capiz

ECO­NOM­ICS is all around us be­cause most, if not all, the things that we con­sume, buy, pro­duce, or share should re­quire time in de­cid­ing whether or not to pur­chase or spend re­sources for it.

Eco­nom­ics is about the op­ti­mal dis­tri­bu­tion of re­sources to mem­bers of the so­ci­ety de­spite we have scarce re­sources and there are a lot of peo­ple who de­mand to have these re­sources. We need to know how much should be given for what pur­pose and for which in­di­vid­ual or group, de­pend­ing on whether we man­age our own re­sources or those of a group, com­mu­nity, com­pany, coun­try, or econ­omy as proper man­age­ment of re­sources bring great re­sults.

In eco­nom­ics, there are micro­eco­nomics or the study of eco­nom­ics at an in­di­vid­ual, group, or com­pany level and macroe­co­nomics or the study off the econ­omy of an en­tire coun­try or econ­omy.

So­ci­eties, gov­ern­ment, busi­nesses, house­holds, and in­di­vid­u­als al­lo­cate its scarce re­sources like their re­spec­tive bud­gets for dif­fer­ent pur­poses and it must be done wisely to maximize the re­source they have with­out de­plet­ing it.

In giv­ing a cer­tain amount or quan­tity of re­sources, we must al­ways be mind­ful of the op­por­tu­nity cost. The op­por­tu­nity cost is about whether or not an op­tion is more ben­e­fi­cial than the other op­tion or op­tions. Be­ing able to fig­ure out the op­por­tu­nity cost of each op­tion will help the de­ci­sion maker come up with the most ben­e­fi­cial de­ci­sion. Who knows some­thing that is ex­pen­sive in the short-term will save the en­tity a large amount of money in the long-term?

We also need to know why we, the com­mu­nity, the coun­try, or the econ­omy is in the state that it is in when it comes to their eco­nom­ics like poverty or get­ting only a small in­come, un­em­ploy­ment, low eco­nomic growth/ low fi­nan­cial growth.

The dif­fer­ent prin­ci­ple in eco­nom­ics as well as our knowl­edge in fi­nances will help us fore­see the pos­si­ble long-term ef­fects of a par­tic­u­lar move through fore­cast­ing.

We also need to know why do peo­ple make de­ci­sions when it comes to eco­nom­ics like why do peo­ple pur­chase cer­tain things.

Just like how the coun­try’s fu­ture can be de­ter­mined by how well the lead­ers han­dle its econ­omy, in­di­vid­u­als can pros­per fi­nan­cially if they man­age their mi­croe­co­nomic con­di­tion well.

Although eco­nom­ics is grand in scale, we can apply it in gen­eral in our per­sonal lives and the macroe­co­nomic as­pect of it af­fects our lives also. ( Paid ar­ti­cle)

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