Level A2 Economics

To start with I should say that economics is as old as the human race: it is probably the first art which man acquired. For instance, when some cavemen went out to hunt while others remained to defend the fire or when skins were traded for flint axes we had economics.

But economics as an academic discipline is relatively new: the first major book on economics Adam Smith's "The Wealth of Nations" was published in 1776. Since that time the subject has developed rapidly and there are now many branches of the subjects such as microeconomics, macroeconomics, international economics and so on.

In general, economics is a comprehensive theory of how society works. The great classical economist Alfred Marshall defined economics as "the study of a man in the everyday business of life".

To my mind, any definition should take account of the guiding idea in economics which is scarcity. You know that virtually everything is scarce; not just diamonds or oil but also bread and water. How can we say this? The answer is that you only have to look around the world to realize that there are not enough resources to give people all they want. It is not only the very poor who feel deprived; even the relatively well-off seem to want more.

Thus when we use the word 'scarcity' we mean that: all resources are scarce in the sense that there are not enough to satisfy everyone's wants. Actually, we have limited resources both in rich and poor countries. In this way the economist's job is to evaluate the choices that exist for the use of these resources.

Another aspect of the problem is people themselves; they do not just want more food or clothing, but specific items of clothing and so on.

One alternative definition of economics is that it is the study of wealth. By wealth the economist means all the real physical assets which make up our standard of living: clothes, houses, food, roads, schools, hospitals, cars, oil tankers, etc. One of the primary concerns of economics is to increase the wealth of a society, i.e. to increase the stock of economic goods.

Level A1+ Economics

Economics is the study of how society allocates scarce resources and goods. Resources are the inputs that society uses to produce output, called goods. Resources include inputs such as labor, capital, and land. Goods include products such as food, clothing, and housing as well as services such as those provided by doctors, repairmen, and police offices. Most resources are scarce. Scarcity motivates the study of how society allocates resources and goods.

The term market refers to any arrangement that allow people to trade with each other. The study of the market system, which is the subject of economics, is divided into two main theories; they are macroeconomics and microeconomics.

Macroeconomics is concerned with the study of the market system on a large scale-the household sector, which includes all consumers; the business sector, which includes all firms; and the government sector, which includes all government agencies. Microeconomics is concerned with the study of the market system on a small scale such as individual consumers, individual firms, or individual government agencies.

There are three economic goals: economic growth, full employment, price stability

Дата добавления: 2015-11-14