10 Reasons Why We Study Economics are listed and discussed in this article. We hope it is able to satisfy the demands of your research.
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Due to its vast nature, ‘Economics’ has not had a specific definition because it has been defined in many ways by different persons according to their views of economics.
It has been defined as a social science that looks into the study of human beings and their behavioral pattern. In this article, we will just look at some key definitions by renounced economists around the world.
According to Alfred Marshal, economics is defined as “the study of mankind in the ordinary business of life.”
His definition simply stresses the point that economics has something to do with the study of human beings in connection to their economic activities on a daily basis.
According to Adam Smith, popularly called the ‘Father of Economics, Economics is “An inquiry into the nature and causes of the wealth of nations.”
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To validate his point of view, Economics is seen by him as an all-encompassing process of making wealth. He was the first person to put work together on Economics by writing a dissertation on the subject matter which he called, “Wealth of Nation”
John Stuart Mill saw economics as “The practical science of producing and distributing wealth. From the viewpoint of John Stuart Mill, economics is majorly concerned with how people produce and distribute different goods and services that are required in order to maintain the existence of human beings.
Regardless of all of these definitions listed above, as well as many other definitions, Professor (Lord) Lionel C. Robbins came up with a definition that has been widely accepted according to him, economics is defined as “The Science which studies the behavior of humans in connection with ends and scarce means which has alternative uses”.
The definition is widely accepted because it seems to cover most of the aspects of economics such as wants, scarcity, choice, and human behavior.
The wants of humans or ends are usually so numerous and insatiable, relative to available resources or means of satisfying them.
Therefore, the choice has to be made in order to maximize or get the best out of the available scarce resources to meet the various economic ends.
As a result of scarce resources, human wants can be arranged in order of preference. These scarce means or resources can be used in different or alternative ways to satisfy human wants.
Why We Study Economics
Hence, we study the subject of Economics for the following reasons:
1. Allocation of resources
Because of the study of economics, the government is enabled to judiciously allocate resources that are not sufficient to all the sectors of the country.
2. Preparation of Budget
It only takes the idea of economics before a good budget can be prepared that will serve a country and meet the most important needs.
When budgets are prepared without a knowledge of economics, the wants may be favored against the actual needs of the country or state at the time. Also, the knowledge of economics will help to identify the income and expenditure of a country’s resources.
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3. Development of programs
The study of economics helps the government to create and develop some programs that are helpful to the masses.
In production, economics helps to know what is needed at the moment, what is no longer needed, and what will be needed in the future in order to enable the producers to adequately produce what is relevant, rather than running into losses in the quest for production.
5. Helps to solve economic problems
The study of the subject helps individuals, government, and firms handle their challenges using the various principles of the subject.
6. Participation in Government
The study of the subject helps citizens of a could try to actively participate in the government system of the country, thereby, improving the economy.
7. Consumption of goods
Economics helps us to know which goods are consumed most in our economy, thereby enabling the producers of the goods to make more profit in production.
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8. It Helps you to Understand your Buying Habits
By studying Economics, you will understand certain concepts such as your own Willingness to Pay (WTP) which is the maximum amount someone is willing to pay for a good service. Learning similar concepts will help you come to terms with your own purchasing behavior and allow you to make favorable decisions.
Because there are many wants surrounding a person, the study of the economy helps individuals, even a nation to know which of them wants to attend to at a given point in time with the resources available.
10. It Aids Vocabulary Expansion
The field of Economics has its own unique vocabulary. Listening to an Economist who is well-learned, you will understand exactly what favor you are about to do for yourself.