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Economics is the social science used to study the production, distribution, and consumption of goods and services. The major focus is on the behavior and interaction of the economist. There are two types of economics; the first one is macroeconomics, and the second one is microeconomics.
Example of economics: Opportunity Cost
Opportunity costs are used to study the profits that a person earns or business drops if it selects different alternatives over previous resources. Normally, all the business decisions are not taken by checking the availability of the resources; hence, many opportunity costs are overlooked or missed.
Opportunity Cost = Return of Former Option – Return of Later Selected Option
Suppose a business is ready to invest its additional money in stock markets to make an annual return of 20%. But it makes a return of 15% within the same year. In this case, it precedes a return of 5% (20% – 15%) that has increased by spending in stock markets. This 5% considers the opportunity cost for the business. Two major categories of Economics homework help.
Microeconomics centers around how end-users and firms decide; these people can be individuals, families, a business/association, or government offices. Examining certain aspects of human behavior, microeconomics attempts to explain how they react to cost & what they do at different price levels. It tries to clarify how and why various products are valued unexpectedly, how people make budgetary choices, how people best trade, and facilitate and help each other. Following are some important Microeconomics topics
In this branch of economics, we study the overall working of national & international economies. Its focus can include a nation, a geographical region, a continent or even the whole world. The following are a few important macroeconomics topics.
It is a basic concept of economics that is used to describe the availability of limited resources to meet the unlimited needs. For example, the technology in many countries is still limited but the demand for technology is unlimited. Therefore scarcity allows us to use the least resources to meet the high demands.
The demand and supply is a major concept. It is known as the pillar of the market economy. Demand refers to the number of goods and services that the customers want to buy at the given price. On the other hand, supply refers to the availability of goods and services for the vendors and suppliers to sell at the given price. In most of the cases when the company wants to increase the demand of their product they lower the price of their product so that the products would have the high demand and they meet the demand by proper supply.
It is the major point for the business. Because everyone in the industry wants to make money. It is based on the comparison between the cost and benefits of various products and services in order to increase their revenue as high as it can be.
It is similar to the extra money that is paid by the employer to the employee in order to motivate themself to perform the job with more effort. Economic theory has two types of incentives i.e. extrinsic incentives and the intrinsic incentives. The extrinsic incentives provide the motivation to the person to accomplish the task. On the other hand, the extrinsic incentives are based on the money, discounts, rewards, and bonus extra.
It is the process that is based on some points i.e. the past data observation and the problem in hand. With the help of this technique, we take the estimation of what choice will be made by the people on an irrational basis and why they would make them.
In this process, we break down the problem into various parts or compete to find out which factor influencing it.
It is a simple technique that eliminates the source of bad choices from economics.
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