Economics is the study of how individuals utilize scarce resources. It is all about making choices on how to spend the scarce resources. In other words, economics deals with the problem of scarcity and how it can be solved. A country utilizes the knowledge of economics to provide welfare to its citizens. As a result, economics is divided into two major parts that include microeconomics and macroeconomics. Microeconomics deals with how individual agents such as firms, workers, and households spend their resources within the economy (OpenStax Economics, 2017). It is a branch of economics that studies the individual behavior of agents within a country such as consumption, level, and determinants of production etcetera. On the other hand, macroeconomics focuses on the study of the aggregate economic activities such as monetary policy, fiscal policy, and the level of goods and services produced within a country in a period of one year (GDP) (OpenStax Economics, 2017). For instance, monetary policy controls the money supply and demand through policies implemented by the central bank while fiscal policy focuses on government expenditure and taxation (Frank, Bernanke, Antonovics, Heffetz & Norander, 2016).
Education is an important aspect of life. Every decision made has a tradeoff. It is through the tradeoff that the opportunity cost is created (Frank et al., 2016). Due to the limited time and resources, a tradeoff involves making a sacrifice that best allocates resources to the best available alternative. For example, attending college is the tradeoff while staying at home or choosing a job is the opportunity cost. For now, attending college is the best choice for I have to sacrifice my time and money to reap future rewards in terms of salaries and wages. In my decision to join this program, I had to choose a course within the budget constraint. The budget constraint implies that a household must live within his or her means (Frank et al., 2016). Most importantly, my choice for the program is because of the job opportunities that await economic graduates. I analyzed the income earned by economists and the different fields of study that can be combined with economics such as accounting to make a decision about joining the program. The information available to me was adequate to help me make a decision to enroll in this program. Nevertheless, I did not have the information on the areas of specialization in economics that would match my interests. I hope that as I continue with the program, I will have gained adequate knowledge of economic theory and application. However, my choice came with an opportunity cost. I had to forego my best next alternative (Frank et al., 2016) of studying medicine but I had a weakness in biological sciences. Most importantly, the decision to pursue with the program was from a microeconomics point of view because I was concerned about my own welfare. I did not make the decision on a macroeconomics level of thought because I was not aware that the aggregate performance of the economy compliments the individual agents. The module has enlightened about the close connection between micro and macro principles of economics.
In conclusion, economics is a field of study that analyzes the problem of scarcity and how it can be solved. Each and every day, people are faced with choices and how to allocate resources to the limited resources. Therefore, economics revolves around every aspect of life. In other words, economics can be defined as the study of welfare. There are two major branches of economics namely microeconomics which focus on the individual agents within an economy while macroeconomics is concerned with the aggregate economic performance. In the efforts of dealing with scarcity of resources, choices are associated with a tradeoff. Every decision made has a cost or an opportunity cost because a sacrifice has to be experienced. When a choice to pursue a college degree is made using the available information, one must sacrifice time and money to attain the value of education.
Frank, R., Bernanke, B., Antonovics, K., Heffetz, O., & Norander, P. (2016). Principles of Economics. New York, NY: McGraw-Hill Education.
OpenStax Economics. (Jul 21, 2017). Principles of Economics. OpenStax CNX. Retrieved from: http://cnx.org/contents/[email protected]
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