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How Economics Have Changed My Life
They say that if you look at it things closely, you will see the essence of economics going about its daily routine. Indeed, from the man buying his morning coffee to the woman calling for a cab, the economic system is all around us. Not many people notice it (or are just apathetic about it). But surely, it's everywhere. Day and night - it never stops. The moment the sun sets in one part of the world, money starts circulating on the opposite side. The buying and selling of goods begins. Services now continue with their proceedings and processes. And infrastructure construction resumes. Truly, depending on how one views his or her own surroundings, one will be able to see the active nature of economics.
Economics, in the simplest sense, refers to the study of the production, distribution and consumption of goods and services. As a field of study, economics aims to comprehend the daily processes of the subjects mentioned. As such, the study of economics helps people understand the never ending activity of economics within their daily lives.
Apart from the study of the production, distribution and consumption of goods and services, probably one of the most important aspects of economics is the study or analysis of scarcity. Scarcity, in the economic sense, means the availability (or unavailability) of resources (insufficient) that are used to satisfy the needs and wants of the populace. As what the late Lionel Robbins - a British Economist of the late 20th century - had claimed, "Economics is the Science which studies human behavior as a relationship between ends and scarce means which have alternative uses." Using Robbins' definition, it can be deduced that the study of economics is the study of man's choices over how to fulfill his needs and wants through the regulation and use of scarce natural resources. In its activities, economics attempts to make full use of scarce resources efficiently. This nature of efficiency helps the adherents of economics - and in the general sense, the entire world - to understand the world around them. Simply said, it helps the person who is familiar with economics understand how or why a certain product's price goes up or down. Likewise, a person who understands the study of economics will be able to determine the economic health of his or her own country; thus, paving the way to understanding and interpreting some possible implications to the politics of the nation, its society and its environment. Truly, people who understand economics are people who understand how the world works (at least in terms of human resources and human activity).
Let us take, for example, the Stock Market. How does a stock price go up? Why does it go down? How do people profit from it? Oppositely, how do people lose money from it? Economically speaking, the Stock Market is or can be used as a determinant for the country's economic growth and development. As such, people who understand the Stock Market will be able to understand the aggregate economy of the country. However, before everything else, one must first understand the study of economics before one can understand the working's of the Stock Market. This statement only highlights the importance of economics in our daily lives.
Personally, my study of economics has helped me advance my life in many ways. For starters, it has helped me understand the law of supply and demand. The law of supply and demand is undoubtedly one of the strongest foundations of every economy in every country in the world. As the law dictates, the higher the demand, the higher the supply and consequently, the higher the supply, the lower the demand becomes. Basically, the law follows a simple cycle of product prices fluctuating in response to the populace needs and wants. Understanding this law benefits me in more ways than one. For instance, I am able to anticipate whether a certain product's price will go...
Cited: Robbins, Lionel (1945). _An Essay on the Nature and Significance of Economic Science_. London: Macmillan and Co., Limited
Sowell, Thomas (2007) _Basic Economics: A Common Sense Guide to the Economy_ Basic Books
"Economics" _Grolier Encyclopedia of Knowledge_ Grolier Incorporated 2000
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