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Economics in Simple Words

Economics is the study of how society uses resources to produce commodities(goods and services) and distributes them among the people. Economics is a branch of social sciences. Economic science thrives to improve the living conditions of the people.

Economics works on the behaviour and interaction of the economic agents and working of the  economies. Basically Economics studies the choices made by individuals, businesses, government and nation about how to allocate resources. The basics of economics involves the study of labour and trade. Now the human labour can be used in many ways and in the same way resources can be acquired in different ways and it is the task of economics to find out which method gives the best results.

Micro and Macro Economics

Microeconomics:  Is concerned with the elements of the economy. It focuses on individual, markets, people and businesses. Individuals represent firms, households, buyers and sellers. Microeconomics deals with there interaction and the results of these interactions. Microeconomics explains how individuals make financial decisions, why different goods are priced at different prices, how individuals trade, coordinate and co-operate with one another. It also explains how business firms functions, how people deal with uncertainty, how labour is allocated and it's basis of division. Risk, strategy and game theory is also attached to microeconomics. To sum up, microeconomics analyses aspects of human behavior as to how they respond to changes in price, why they demand and what is the basis of their decisions.

Macroeconomics:  Is concerned with economic system as a whole. It deals with behavior and impact of economy on the elements of it. Here investment, savings, consumption, production have effect on employment, currency, land, economic growth. It studies the economy on a national and international level. It covers geographical areas, continent, country or the whole world. It primarily studies about economic cycles, economic growth and development. Topics covered are foreign trade, unemployment rates, government fiscal and monetary policy, level of inflation and interest rates, GDP, recessions, depressions and booms.

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The Father of Economics

Adam Smith - is considered the father of modern economics. He is Scottish economist, author and philosopher from 18th century. Through his first book - "The Theory of Moral Sentiments", he proposed the idea of invisible hand. He proposed that the free markets have a tendency to regulate themselves through supply and demand, by means of competition.

Smith was known to introduce the concept of Gross Domestic Product (GDP). He also introduced the idea of differential wage compensations. According to him undesirable and dangerous jobs tend to be paid higher wages as a way of attracting labours to these positions. He introduced idea of the assembly line methods of production.

His 1776 book, was the most notable contribution to economics, " An Inquiry into the Nature and Causes of the Wealth of Nations". Some of the concepts introduced by Smith are the basis of classical Economics and are truly inspiring. Students should be inspired by him and be rest assured to get Economics homework assignment help in UK from BookMyEssay.

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Reason of studying Economics

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