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The word Economics is derived from two Greek words, ‘eco’ meaning home and ‘nomos’ meaning account. Economics is a branch of science that studies and deals with the production of wealth, distribution and consumption of products and services. It analyzes how nations, individuals and business organization allocate resources to meet their needs. It studies the human behavior and their decisions and choices in times of scarcity. The publication of the book ‘An Inquiry Into the Nature and Causes Of the Wealth of Nations’ by Adam Smith in 1776 recognized economics as a separate branch of science. Economics focuses on four production elements.
These include:
The basic natural resource that an organization requires to create goods and services. These products and services in turn generate revenue and profit that is required to run an organization. The scope of land is not restricted to ownership but also utilization of natural resources including crude oil, coal, gold and natural gas. For example, an energy utility company requires land to setup its basic infrastructure. It also requires coal, crude oil or water produce power
This refers to the efforts and work put up by laborers and employees of an organization to produce the company’s goods and services.
This element includes the utilities that are required to produce goods and services. The utilities differ with the type of products and services. They can range from machinery, gadgets to even computer applications. For example, a computer programmer uses a computer to write applications. A graphics designer uses specialized editing and painting applications to manipulate and enhance images. A photographer requires a camera and lens to capture images. The utilities that each of them use are different but they also produce goods and services.
This elements brings together the land, labor and capital aspect of production. For example, an entrepreneur starting a graphics designing company would setup an office where there is a high demand for its services. It would then hire skilled photographers and designers who would contribute to the production of goods and services. The company would also provide them the gears and tools needed to create the products. Risks and rewards are managed by the entrepreneur.
Human beings have infinite wants. But the resources available to us are limited and finite. Economics studies how scarcity of resources affects choices. It tries to find solutions to problems that typically show up as expenses for living in communities. It includes exploring and analyzing the issues at an individual level and also exploring problems that affect the country’s as well as the world’s economy. Depending on the context, economics can be divided into two types.
These include:
MICROECONOMICS ASSIGNMENT HELP: Microeconomics studies the individual’s behavior and decisions. An individual can be a single person or a group of people or an organization. It focuses on the factors that determine the price of a product in an economy. It also studies different regulations and taxes imposed by the government and its relation to the price factor of goods and services. For example, the scope of microeconomics on an organization would include finding solutions that increase production while keeping manufacturing costs down. It includes concepts like supply and demand, budget constraints, marginalism and opportunity cost
MACROECONOMICS ASSIGNMENT HELP: Macroeconomics is concerned with the bigger picture of studying economic problems that affect a country or has an impact on the world. It studies policies that affect a nation’s economy. It takes factors like how change in net exports contributes to the capital of a country or how the Gross Domestic Product (GDP) is affected by monetary policies or the rate of unemployment. Macroeconomics focuses on aggregates which include national income, the rate of unemployment, inflation in price and fiscal policies.
CIRCULAR FLOW OF INCOME ASSIGNMENT HELP: The Circular Flow of Income is an economic model that describes how money flows in a country’s economy. It states that money flows to laborers and employees in the form of wages. This income is used by an individual to buy basic products like food, shelter, water, healthcare and entertainment products. On the other hand, business organizations use labour, land and capital to build products and services. Laborers are paid money for their services in building products for the company. This money again returns back to firms for exchange of products and goods. This economic model takes in to fact that an economy is made up of households and organizations. In reality, money flow in an economy is complex and includes other sectors like the government and the foreign sector. The Government sector comprises of welfare programs and infrastructure maintenance that the government spends money on. The Foreign sector includes exports where entities from outside the nation’s economy buy products. Just like money is pushed into the economy it can be taken out through different ways.
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Economists are people who possess a sound financial knowledge on how markets function. They collect and analyze financial data related to the economy. They might use this data to exert their influence on business and government organizations in making decisions that affect the nation’s economy at a macro level. Economists also draft data in the form of presentations that are accessible and understandable by the general public. They also work towards contributing vital information to publications and journals. They conduct surveys using various techniques and assess market trends to back up their findings.
Understanding economics is important in dealing with the problems that the modern world faces. It helps in finding solutions in dealing with an economic crisis when demand for a product outweighs its production and supply. It creates well-rounded individuals who are capable of understanding market trends and take sound decisions during a scarcity
Economics use indicators to draft reports. They are basically parameters that help in understanding how a country is performing in a certain area. These reports are generally published by private or government agencies on a regular basis. These indicators affect the stock and forex market. They serve as important tools for investors in taking sound investment decisions.
A brief explanation of the indicators is listed below:
GROSS DOMESTIC PRODUCT [GDP]This is considered by most people to be the prominent measuring tool of a country’s performance. It is the total value of all the goods and services produced in a country during a specific year or period. GDP works great in understanding the current market trend. It’s not able to predict upcoming trends. The Gross Domestic product takes into account:
These factors are derived from the Circular Flow of Income. They can be used to calculate the Gross Domestic Product of a country.
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Demand refers to the customer’s desire to buy a product for a specific price. Supply refers to the production of a product by manufacturers. The basic economic principles of demand include:
The Law of Demand defines that the demand of a product decreases with how high the price is. This is a result of diminishing marginal utility. This stems from the fact that human beings as consumers first focus on meeting their basic needs. The law of demand along with the law of supply dictates allocation of resources in a market.
This concept assesses the demand for a substitute product when the price of the main product has increased. The cross elasticity of demand for a substituted product is always positive. For example, if the price of Pepsi increases the demand for a substitute carbonated soft drinks like Coca Cola would increase.
Given below are a few important economics assignment questions. Get in touch with us if you need help. Our experts are ready to help you 24x7.
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Applied Economics utilizes core economic theories and econometrics to address existing economic problems. It reduces the abstraction of core economics and provides a more practical approach to understand and solve problems related to the economy. Applied Economies is used to solve issues in a variety of fields. These fields include:
Behavioral Economics studies the behavior of individuals and organizations and its impact on economic decision making. Behavioral factors include:
Behavioral Economics state that every human being is irrational and incapable of taking the right decision. It studies the reason between such irrational behaviors. For example, an individual might think about career options, saving options, which phone to buy, retirement plans. Behavioral economics tries to explain why an individual favors one option over the others. Companies have started to implement behavioral economics to increase sales of products and goods.
For example: Amazon might sell an iPhone through their online vendors for 800$ but decrease the price to 720$ during Amazon Prime Day Sale. The consumer feels that the offer is a good deal that cannot be missed and ends up falling into the temptation.
Behavioural economics include the following:
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