Generally, term of mathematical patterns”. Professor Israel Kirzner points

Generally, most people
feel that the world “Economics” is quite familiar, but it is hard to explain
the subject surely. There are many different answers regarding with economics,
some people can say ‘it is about studying of money”, “It is a kind of making
business that can get profit and loss” that explain by another person, some
other people argue  “No, it is about
society choosing and then it is going to contribute wealth”  other people with different point of views
might claim ” It is expression and explaining the prices movement so as to be
in term of mathematical patterns”.

Professor Israel
Kirzner points out, in The Economic Point
of view, that there are many ways and series of calculation of the economic
point of view that are amazing in their variety.” Economics is a kind of science
and it is one of the youngest sciences that is why it become the main reason of
this confusion.

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            The
beginning realization was provided by a lot of scholars  that economics was a new way of looking at
society. Rather than any other social philosopher, Adam Smith is more
popularized the notation that human beings, left free to pursue their own
goals, and would give rise to a social order without being had continuously
planned. He put it in The Wealth of
Nations, free man acts as if “led by an invisible hand to promote and end
which was no part of his intention. Studying economics has good benefits that
can be having a deeper understanding of own saturation. For example, people
usually cannot make proper account for their choice, however, when people
understand that costs are measured in terms of foregone alternatives, most of
them might have a very different view of some common choices. It is crucial to
evaluating questions of policy is one of the other benefit of understanding of
economics. The central concept of economics is the planned actions of real
human beings, and it advantages by analyzing the thinking used in making those
plans.

 

Production and consumption are economics problems.
Scarcity is the central economic problem, shortage the resources. The resources
or factor of productions are labour, land and raw materials and capital. Demand
and supply are importance to be reconciled. There will be actual and potential
demand and supply. For those industries with labour intensive like agriculture,
restaurant and food service, hostility will need less capital and for those kinds
of industries with capital intensive like oil production, telecommunication
will not need much labour.

Two common types of
economics are macroeconomics and microeconomics. Macroeconomics is about the
whole economics issues like growth, unemployment, inflation, balancing of
payments problems and cyclical fluctuations. Microeconomics is for individual
economics. Microeconomic issues are choices between limited and unlimited
resources. For example, what resource will use, labour intensive resource or
capital intensive resource, how to utilize it and those production or services
for whom. The concept of opportunity cost is key concepts in economics that
described the basic relationship scarcity and choice.

The rational economic
decision making considered between marginal costs and marginal benefits. If
marginal costs are less than marginal benefits mean that products or services
will do more, but when marginal costs are greater than marginal benefits,
products or services need to reduce and do less. If marginal costs and marginal
benefits are same, it is the best saturation. Microeconomics objectives are
efficiency and equity. The production possibility curve shows choice and
opportunity cost, increasing opportunity cost in microeconomic and the
production possibility shows production within the curve and shift in the curve
in macroeconomics.

The circular flow of
income considered the size of total flows for macroeconomic issues and it
considered individual markets and choices within goods and factor markets for
microeconomic issues. The circular flow involved firms and households. The
goods markets consist of real flows: good and services, money flow: consumer
expenditure. The factor markets consist of real flows: services of labour and
other factors, money flow: wages and other incomes.

There are generally three
types of economic systems as market economies, command economies and mixed
economies. Market economies are that all productive activities are privately
owned and production is determined by the interaction of supply and demand. In
command economies, government is the one who plans the goods and services that
a country produces, the quantity that is produced, and the prices as which they
are sold. Mixed economies mean there are certain sectors of the economy
servicing under private ownership and free market mechanisms while some other
sectors have significant state ownership and planning. The advantages of
command economies are high investment, high growth, stable growth and social
goals pursued, and then there is low unemployment. On the other hand, there are
problems of gathering information, expensive to administer, inappropriate
incentives and shortages and surpluses as disadvantages. In the free market
economy, demand and supply decisions are key factors. As for the price
mechanism, there are shortage and surpluses, equilibrium price and respond to
changes in demand and supply and another fact is the interdependence of markets.
The advantage of free market economy are transmits information between buyers
and sellers, no need for costly bureaucracy, incentives to be efficient and
competitive markets responsible to consumers. There are problems of a
free-market economy also, the competition may be limited with problem of market
power, and there is no equality, the environment and other social goals may be
ignored.

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