Adam Smith – Economics is an inquiry into the nature and causes of the wealth of nations.
Ralph W. Emerson – He described the primary concern of economics as want and said: “Want is a growing Giant whom the Coat of Have was never large enough to Cover” (i.e. Limited resources but unlimited wants).
General Definition – Economics is a social science discipline that deals with the optimal allocation of the scarce resources. Human beings/nations have unlimited wants but limited resources hence these resources have to be allocated optimally/efficiently to maximize utility/profit/gain. It also deals with the distribution of the society’s output among individuals), the way output changes over time and the efficiencies and inefficiencies of economic systems.
Micro-economics – This is the branch of economics that is concerned with the behaviour of individual firms, industries and consumers / households and the way decisions are made in these individual entities e.g. max utility or profits or revenues or output or min costs.
Macro – economics – This is the branch of economics that examines the economic behaviour of large aggregates, i.e. income, employment, output, inflation etc of the nation.
Economics is useful in helping decision makers to adapt to external changes in economic variables. Increasing advertising (may be due to competition) or investments involve economic decisions and therefore economic theory helps managers to make the right (most profitable) decisions.
Economics is also vital to those who work for the government agencies and non-profit institutions. Although they lack the profit maximization objective, they do involve economic efficiency e.g. a government agency may need to allocate a government budget to attain maximum benefit in health hence managerial economics aspect.
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