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What is economics?

Everything we do creates some value somewhere, whether for ourselves or someone else. Even if you watch a TV series, you consume electricity, the internet, and, most importantly, your time. The electricity company will charge you for electricity, which will help them run their company and pay their staff. Likewise, you are helping broadband companies and OTT companies like Netflix. Even while sitting, you help a sofa company grow its business, and while sleeping, help a mattress company grow more profitable.

Not every activity, though, is considered an economic activity as per the economists. For example, the household work (like cleaning, cooking, etc.) does not fall under the GDP (Gross domestic product) calculations. GDP is the tool that economists use to measure economic activities.

A formal definition of economics is as below.

Economics is a branch of social science that studies the production, distribution, and consumption of goods and services. It deals with how individuals, governments, businesses, and nations make their choices about resource allocation. Two of the most important branches of economics are microeconomics and macroeconomics. 

FAQ

• How does the study of economics help you make better choices?
• Also, how does understanding economics help you understand the world?
• How can studying economics help you in your day-to-day life?

Economics topics

These are some of the main economics topics:

• Scarcity and cost-benefit analysis
• Real, relative, and nominal prices
• Opportunity cost
• Exchange and Trade
• Market Failures, Public Goods, and Externalities
• Division of Labor and Specialization
• Economic Growth and Inflation
• GDP and Human Capital
• Markets and Prices, Supply and Demand
• Elasticity of Demand
• Healthcare and Social Security
• Costs of Production including Labor Costs
• Income Distribution and Income Inequality
• Monetary Policy and the Central Bank
• Banks and Financial Institutions
• Business Cycles
• Fiscal Policy
• Government Debt and Government Budget Deficits
• Exchange Rates and Foreign Currency Markets
• Balance of Payments and Balance of Trade