What are your reasons for studying Economics?
What are your reasons for studying Economics?
Human wants are unlimited and resources to satisfy these wants are limited and these limited resources have alternative uses. The basic concern of Economics is to allocate the scarce resources to the best possible use in order to derive maximum benefit from the scarce resources. Due to the scarcity of resources having alternative uses, an economy needs to allocate the scarce resources to the areas with maximum possible and optimum returns. The following are the reasons that make the study of economics important:
(i) To Study the Consumer Behaviour - The theory of consumer behaviour in Economics deals with the study of the behaviour of the consumers in different types of market situations. This theory helps us understand how a rational consumer makes his/her decisions to get the maximum possible satisfaction in the given income and given prices of the goods and services.
(ii) To Study the Production Theory - The theory of production studies the production decisions of the producers in different types of market. The theory explains how a producer takes production decisions related to maximisation of output in the given cost or the minimisation of cost for a given level of output. The theory highlights how a producer combines different inputs (given their prices) in order to minimise the cost of production and to maximise the profits.
(iii) To Study the Distribution of Income - The study of Economics makes us aware about the distribution of national income. In other words, it tells us how the income arising from the total production in an economy is distributed in the form of wage, rent, interest and profit to different factor owners (like labour, land, capital and entrepreneur).
(iv) To Study the Macroeconomic Problems Faced by an Economy - Economics proves to be the most powerful tool to understand and analyse the root cause of basic macroeconomic problems faced by an economy like poverty, unemployment, inflation, recession and so on. Economics helps us not only in understanding the interrelationship among these problems but also to take various corrective measures.
Human wants are unlimited and resources to satisfy these wants are limited and these limited resources have alternative uses. The basic concern of Economics is to allocate the scarce resources to the best possible use in order to derive maximum benefit from the scarce resources. Due to the scarcity of resources having alternative uses, an economy needs to allocate the scarce resources to the areas with maximum possible and optimum returns. The following are the reasons that make the study of economics important:
(i) To Study the Consumer Behaviour - The theory of consumer behaviour in Economics deals with the study of the behaviour of the consumers in different types of market situations. This theory helps us understand how a rational consumer makes his/her decisions to get the maximum possible satisfaction in the given income and given prices of the goods and services.
(ii) To Study the Production Theory - The theory of production studies the production decisions of the producers in different types of market. The theory explains how a producer takes production decisions related to maximisation of output in the given cost or the minimisation of cost for a given level of output. The theory highlights how a producer combines different inputs (given their prices) in order to minimise the cost of production and to maximise the profits.
(iii) To Study the Distribution of Income - The study of Economics makes us aware about the distribution of national income. In other words, it tells us how the income arising from the total production in an economy is distributed in the form of wage, rent, interest and profit to different factor owners (like labour, land, capital and entrepreneur).
(iv) To Study the Macroeconomic Problems Faced by an Economy - Economics proves to be the most powerful tool to understand and analyse the root cause of basic macroeconomic problems faced by an economy like poverty, unemployment, inflation, recession and so on. Economics helps us not only in understanding the interrelationship among these problems but also to take various corrective measures.
