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An Introduction to Economics

2/18/2018

 
An Introduction to Economics​

Ever wondered how the world works, how financial markets or industry outlooks affect the economy, our lives, or even how people and groups of people use their resources?


The answers all lie in the field of economics. In this article I'm going to try and explain some of the fundamental concepts of this extremely fascinating subject which encompasses almost every aspect of life, from daily transactions to landmark governmental policy decisions.

So, what is Economics?

Although full of complex terms and confusing details which are often difficult to explain, economics actually affects every aspect of our daily lives.

Economics is about the allocation of resources available to fulfil people's needs and wants for goods and services.

In a perfect world, everyone has unlimited resources and is able to satisfy all their needs and wants. However, in reality, resources are scarce or limited and all of our needs cannot be satisfied. We therefore have to make decisions about allocating our limited resources in the best possible manner. Economics studies how these decisions are made by both individuals, companies and governments.

Economics can be divided into two general categories:
  • Microeconomics - dealing with the behaviour of individuals and businesses
  • Macroeconomics - dealing with the performance and structure of the entire economy, as opposed to individual markets.

In short, while microeconomics looks at the individual, macroeconomics looks at the big picture.

How do we assess what people want or even how much they are willing to pay for it? How is one industry doing compared to another? What is the economic future of the country or world?

Whether it be managing personal finances and spending, or making an informed decision at the voting booth, an economic understanding is key. For example, if one does not understand the concepts of diminishing returns and externalities, then managing personal finances and optimizing spending habits isl be difficult. Similarly, if one does not understand taxes, inflation or unemployment, then when faced with two candidates championing different economic policies, it will be impossible to know which policy will be most effective and thus make an informed decision on whom to vote for.

Taking a real-life example: if someone was looking for a place to live, and found a home to either buy or rent, how would they decide which option to select? In order to evaluate the benefits and drawbacks of each option, they would need to consider their current financial situation, the length of time they intended to stay in the home and weigh it against the cost associated with the transaction.

So, who should learn economics?

Everyone, including children from elementary through senior school. While younger children can be introduced to it in an interactive manner using aspects of their daily lives; high school and university students can get technical and learn to build on and apply their their prior knowledge to realistic and more complex situations.

Acquiring economic knowledge also teaches important financial skills, such as budgeting, managing investments and filing taxes.
In general, understanding economics can help one become financially literate and aid in creating a secure future.

    Author

    Tara Menon

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    • Book Reviews >
      • Stolen Away
      • Hunger Games
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      • The Red Pyramid
      • Keeper of the Lost Cities
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    • Why Funny Girl Should Be The Movie Of This Generation
    • TikTok
    • Among Us Tips & Tricks
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    • LOONA’s 12:00 album review
    • Behind the Scenes
    • Boycott Mulan
    • Were the F.R.I.E.N.D.S really friends?
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    • Dune Review
    • Top 3 Musicals for Teens
    • That's What You Missed On Glee
    • IPL
    • Champions League 2021
    • Colour Out Of Space Film Review
    • Uncut Gems Film Review
    • Little Women Review
    • Why Amber is the unsung hero of Sofia the First
    • The Two Popes Film Review: A Cinematic Sleeping Pill
    • Why I’m Not Watching Trailers Anymore
    • The Last Black Man In San Francisco: The Best Film Of 2019 That Nobody Is Talking About
  • Current Affairs
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      • Wake up, Boris Johnson
      • First Presidential Debate
      • Brexit: The Political Decision We Can’t Ignore
      • President-Elect Biden
      • US Elections 2020: When will we actually know the results of the election?
      • The US Election
      • Donald Trump's COVID-19 Diagnosis
      • Who Will Replace RBG?
  • Things To Do
    • Vintage Shopping In Singapore
    • Get Your Golf Fix
    • Top 5 Things To Do At MacRitchie Reservoir
    • An Ode to the Humble Stew
    • Drones. Why I love the world from above.
  • Editorial
    • Covid-19 Vaccine
    • Samsung Digital Cockpit
    • Riot or Protest?
    • Robot Baristas
    • Feminism and Men’s Rights
    • Why Don't We Speak About Our Mental Health
    • Anastasia Pagonis
    • Penicillin: The Discovery that Changed the World of Medicine
    • Do Video Games Cause Violence
    • Stairs: Would we be better off without them?
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      • Harriet Tubman
      • Susan B. Anthony
      • Uncovered >
        • McJobs: Uncovered
        • CoVID-19
        • Chinese New Year
        • Poverty
        • Laziness
        • Inequality
    • Apple TV 4K
    • Contortion: An Introduction
    • Lessons From Covid
    • The Animal Hair Cut Craze
    • Know Your French Fries
    • Why 'OK, Boomer' Is Not The 'N-Word of Ageism'
  • Environment
    • The 6th Mass Extinction
    • Climate Countdown
    • I'm Dreaming Of A Green Christmas
    • What Busy People Need To Know About >
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      • Australian Bushfires
      • Hurricane Dorian
      • Greta Thunberg
      • Melting Ice
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      • One Last Breath
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      • The Clock: Part 1
      • The Man In the Bank
      • Adventurous Story Of A TV Remote - Part 1
      • Yishun: The Devil's Ring
      • A World With No Borders
      • An Interview With The Divers At The Heart Of The Thai Cave Rescue
      • The Mountains
      • The Day I Woke Up In Troy
      • In Japan
      • Pertinus the Tenacious
    • Current Affairs Archive >
      • Riot vs. Protest
      • #BLM What You Need To Know
      • A World Of Performative Activism
      • Entrepreneurship: The Key To Go From Zero To Hero
      • Why The U.S-Iran Conflict Is Sure To Escalate
      • Why India’s Citizenship Bill And Its Effects Are More Serious Than We Originally Thought
      • The Rise Of Bitcoin In 2019
      • Hurricane Delta
      • Why Abu Bakr al-Baghdadi's Murder Is More Significant Than We Originally Thought
      • Why Do Many Technology Startups Fail?
      • What Is The Trump-Ukraine Crisis And What Are Its Effects?
      • Ending The Hong Kong Protests - A Guide For Dummies
      • Why Brexit is Going Nowhere
      • Ending the Yemen War: A Guide for Dummies
      • India-Pakistan Conflict: A Dummies Guide
    • Editorial Archive >
      • Singapore's Latest Nuisance: Electric Scooters
      • Why Artificial Intelligence is the Future of Humanity
      • Self Driving Cars, The Future of The Automotive Industry
      • Should We Really Be Afraid Of Artificial Intelligence?
      • Something Is Rotten In The Heart of Tanglin's Head Team
      • Boeing 737 Max 8: A Question of Safety
      • A World in the Dark
      • The Day That Siri Died
      • Does Brandy Melville Fit into the Future of Fashion?
      • #NOFILTERPOETRY
      • World Cup Conspiracies
      • Is Money Really That Great?
      • Why I Hate Valentine's Day
      • How We Became Enslaved To The Social Media Overlords
      • The Projector VS Golden Village
      • A Little Red Dot
    • Entertainment Archive >
      • The Diary of Taylor Swift's Cats
      • Champions League Comebacks
      • It's Bruno, Possibly The Weirdest Show On Netflix?
      • Why Being a Film Fan in Singapore Kinda Sucks...
      • Fortnite Vs Apex: Let Battle Commence
      • The Dying Art Of One Direction Fanfiction
      • Taylor Swift Cancels Concert At The Melbourne Cup
      • Haji Lane
      • To All The Boys I've Loved Before
      • Thor Ragnarok film review
      • The Ring of Fury - Why Now?
      • The Films You Missed in 2018
      • Kingsman: The Golden Circle
  • Category