What is Economics?

Economics is the study of how people satisfy their wants with scarce resources. For example, if you have five dollars for lunch, you can either buy a Subway Footlong or a Little Cesars Hot-and-Ready pizza, but not both. Economics can be divided into two studies, microeconomics and macroeconomics.

 

Microeconomics is the study of economics from the view of individual households or firms. One example of microeconomics in today’s economy is how the BP oil spill kills the fish causing many people to lose their jobs.

Macroeconomics is the study of economics from the viewpoint of economy as a whole, including households, firms, and governments. For example, when the people lose their jobs as a result of the BP oil spill, they spend less money which hurts the economy as a whole.

Comments
  1. rae says:

    Can you used the study of economics in everyday life?

  2. jolee1234 says:

    Yes, everytime people choose how to satisfy their wants and needs with scarce resources, they are using the study of economics.

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